Is it time to consider a new youth development policy in Hong Kong?

Appeared in Sing Tao Daily (in Chinese).

Please follow link for full article.

“In the Long-term Social Welfare Planning in Hong Kong Consultation Paper, which was published by the Social Welfare Advisory Committee nine years ago in April 2010, it was stated that young people are “the future pillars of Hong Kong” and that the “Hong Kong SAR government and the community as a whole attach great importance to nurturing and developing them into our “capital””[1]. There has since been a growing perception in public and policy discourse that young people in Hong Kong have found it more difficult than before to build a ‘good life’ for themselves as they have faced an “increasingly bumpy transition from school to work”[2]. This begs the question whether the Hong Kong government should reconsider its approach to youth development in Hong Kong.

At first glance, statistical headline figures make it relatively easy to brush aside any notion of diminishing opportunities for the younger generation in Hong Kong as around 70 per cent of young people pursue post-secondary education—46% at degree-level—according to the latest Hong Kong government figures. Merely four per cent of households headed by young people live below the official Hong Kong poverty line; the absolute number of poor young people headed households is small and affected mainly students. The overallunemployment rate in Hong Kong stood at 3.1 per cent in 2017 with the rates for young people – 15-19 years of age: 11.1% and 20-29 years of age: 5.7% – comparable or considerably lower than in other rich global cities like London, New York, or Tokyo.

Not least, it would be unfair to dismiss the emphasis that successive Hong Kong governments have placed on youth development by investing significant resources into a whole range of employment services and training programmes, such as for instance, the ‘Career Let’s Go’ programme for secondary graduates, or the Labour Department’s Youth Employment and Training Programme. The University Grants Commission-funded universities offer additional employment support, information on vacancies, and counselling services for future graduates, while the Vocational Training Council has become the largest provider of vocational training for adult learners and school leavers. These various initiatives are indicative of a specific approach to youth development policy, which focuses on investments into the human capital of Hong Kong’s young people, and puts faith in the power of the competitive local economy and fluid labour market to promise fulfilling careers to all of Hong Kong’s youth.

Yet, we are living in a time where internationally the persistent valorisation of higher education has come under scrutiny as differences in university access, subject choice, and educational mobility have persisted for students with different family background. In particular, the disadvantage of young people from lower-status family backgrounds are perpetuated from higher education admission, to their transition from education to employment, their future career development, and general life chances. Indeed, the latest evidence for Hong Kong suggests that the effect of socio-economic family resources on student enrolment increased – rather than decreased – in importance. Particularly housing affordability issues have widened the gap between those who own housing and have the ability to invest in their children’s human capital and those who cannot. Compared to the previous generation of Hong Kongers, fewer young people experience any real upward social mobility, while over half of them – according to recent surveys – believe that social mobility is worse than 15 years ago.

Internationally, researchers are also beginning to build a bigger evidence base on the effectiveness of supply-side activation measures like the ones favoured by the Hong Kong government. And the news is unfortunately not all very good. Meta analysis of classroom and on-the-job training for young people have shown that their income effect is close to zero in the short term and only becomes slightly positive after several years. While vocational training has generally been found to boost young people’s wages at the bottom end of the skills distribution, international evidence suggest it is less successful if it limits university access of young people as is the case in Hong Kong. The effect of the labour tax wedge, which measures market inefficiency by comparing before- and after-tax wages, on employment has been found to foster more economic growth primarily if combined with subsidised public sector employment schemes and fiscal stimulus measures for the economy. But where to look for new approaches to youth development?

In Europe, for example, more generous social protection schemes have for a very long time been argued to not only maintain aggregate consumer demand in the local economy by way of enhancing household incomes of affected individuals, but also enable particularly young people to search for jobs commensurate with their attained skills. Recent statistical models suggests a positive effect of public early education, child- and elderly care services on high quality employment rates. In the United States, an influential theoretical literature on different Varieties of Capitalism posits that the availability of more generous earnings-related social protection enhances incentives for young people to invest in specific, vocational rather than general, portable skills; at the same time, greater protection against dismissal in the case of pregnancy is argued to act as an incentive for young women to enter non-gender specific careers. More broadly still, researchers at the International Monetary Fund have recently suggested that more generous unemployment subsidies and employment protection have a positive effect on employment in strong economic context.

Hong Kong’s Financial Secretary Paul Chan has successfully dampened the public’s expectation for receiving more financial “sweeteners” before unveiling his widely-reported 2019-2020 Budget Announcement. Yet, the Hong Kong government is well advised not to dismiss these lessons from overseas. What they suggest is that much can be gained from putting renewed energy into the search for innovative complementarities between productive and protective youth development policies to unleash the full potential of Hong Kong’s young people in a resurgent Guangdong-Hong Kong-Macao Greater Bay Area.”

[1] Social Welfare Advisory Committee (2010) Long-term Social Welfare Planning in Hong Kong. Consultation Paper.

[2] Wu, X. G. (2010). Hong Kong’s Post-80s Generation: Profiles and Predicaments. Hong Kong: The Central Policy Unit, The Government of the Hong Kong Special Administrative Region.

In the midst of global uncertainty, helping Hong Kong’s most disadvantaged is a matter of priority


Part of the new Lingnanian Opinion Column for HKET. Please follow link for full article.

“For families across the globe, the Christmas and the New Year Eve celebrations are a time of reflection over the year passed and for making resolutions for the year ahead. It is also a time when political commentators usually take a step back from the rapid daily news cycle to take a more ‘bird’s eye perspective’ on the big issues contemporary societies face. Indeed, as we enter into the year 2019, there is seemingly no shortage of big policy issues troubling policy makers both near and far:

Shifting monetary policy by the US independent central bank; the fear of housing bubbles in global cities such as Toronto, Sydney and Hong Kong; a stalled Brexit vote in the British parliament; and the expanding Chinese-American trade dispute all combine to create instability in global stock markets.

After the numerous heat waves during the summer, the recent Indonesian tsunami offered yet another stern reminder of the destructive power of natural and man-made disasters and the need for governments to engage in effective disaster mitigation and preparation. Last month saw 15-year old Swedish environmental activist, Greta Thunberg, tell representatives of over 200 nations at the United Nations climate summit in Poland that “since our leaders are behaving like children, we [the children] will have to take the responsibility they should have taken long ago”.

Despite a shared commitment to reduce global inequality, the latest Global Inequality Report by Oxfam suggests that in 2018 the “richest 1 per cent bagged 82 per cent of wealth created, whereas the poorest half of humanity got nothing”. Also during the past December, the Yellow Vest mass demonstrations in Paris, France were the latest example of a national anti-elitist movement challenging the status quo by calling for lower living costs, more progressive taxation on global wealth, and the legislation of a living wage.

Not least, history books will look at 2018 as the year in which international organisations such as the UN, the EU, the World Trade Organisation, the International Monetary Fund and the North American Free Trade Agreement were all directly challenged by President Trump and his national and international allies as part of an attempt to move away from the post war global order.

Indeed, the question what role international collaboration can still play in managing these big policy issues may be the defining one of our era.

At Lingnan University, we have made a direct contribution to this question by exploring the role of global policy transfer in governments’ attempts to alleviate people’s financial and employment burdens in their everyday lives.

As such, we routinely tell our students about the policy value of comparing social policies across historical, territorial or cultural lines. This is because it is only through comparison that we fully understand what makes the contemporary policy issues we face, or the policy discourse we engage in, similar or special to other times or locations in world history. As the old saying goes: do we really know ourselves, if we only know ourselves. This is true in our personal lives as much as it is for how we assess the laws our policy makers implement.

At the same time, we also instruct our students to be careful when evaluating government projects to borrow lessons from “good practice” examples implemented by their international partners. Policy makers typically do not have the luxury to simply ‘copy & paste’ policies from elsewhere because the effectiveness of those policies typically relies heavily on the specific context in which they operate. Put differently: simplistic calls for Hong Kong housing policies to become more Singaporean, or Hong Kong family policies to be become more Scandinavian more often than not are doomed to lead us into a dead end.

There are, however, global ideational trends that clearly shape the direction of current policy development around the world:

As part of this, the number of social protection schemes in the Global South increased from only 1 in 1993 to 150 in 2015 according to the latest release of the United Nations’ Social Assistance, Politics, and Institutions (SAPI) database. In East and South East Asia alone, the number of income transfer schemes for the poorest members of society increased from 13 to 23.

Higher social protection spending in the poorest countries is thereby shown—time and again—to be related with better health outcomes for children, stronger local economies, improved social networks, and higher social mobility, especially if they are combined with business incentives such vocational training, and access to capital and financial services.

Universal coverage in old age pensions, so heavily debated in Hong Kong, has already been achieved by a whole range of middle and low income countries, including Bolivia, Botswana, Brazil, Lesotho, Mauritius, Mongolia, Namibia, South Africa, Timor Leste, Trinidad and Tobago, and Tanzania.

The cost of universal cast transfers for some 700 million children, pregnant women, persons with severe disabilities and older persons – nearly 10 per cent of the world’s population – is judged by the International Labour Organisation to require only 1.1 per cent of what the rich G20 nations spent to bail out the financial sector in the wake of the 2008 financial crisis.

Global ideas of social protection have certainly travelled to Mainland China, whose national Dibao programme has fast become the world’s biggest social assistance scheme offering cash benefits for some 50 million recipients at a cost of roughly 0.14 per cent of GDP.

Meanwhile, in Hong Kong, Finance Minister Paul Chan Mo-po has made recent headlines by warning that although “the government will [again] have a surplus this financial year” “public resources are not unlimited”. Some have interpreted these statements as a thinly veiled hint that fewer financial measures to support Hong Kong’s most disadvantaged will be forthcoming.

The jury is still out whether this interpretation of the Finance Minister’s recent statements is justified and will be proven to be correct. What seems clear, however, is that given the regional and international trends of governments embracing social investment strategies with affordable social protection policies at the centre, any potential stance of Hong Kong policy makers to limit the expansion of social protection, or reverse recent achievements by allowing existing policies to ‘drift’, would sharpen Hong Kong’s image as a relative outlier in global perspective.

Finance Minister Paul Chan Mo-po also suggested he needs to “strike a balance between different viewpoints” in “avoid[ing] taking care of one policy and ignoring another”. In other words, the future development of Hong Kong’s social protection policies is primarily a question of compromise and priorities. Whether it will become a priority for the Hong Kong government in the coming year 2019 remains to be seen.”