What Happened
Youth unemployment in Panama has climbed sharply, affecting 113,347 people between the ages of 15 and 29 who are without formal work. The hardest-hit group is young adults ages 20 to 24, with 52,064 unemployed, followed by 40,905 people ages 25 to 29.
The problem has worsened over the past year. The youth unemployment rate rose from 17.8% in October 2024 to 19.9% in September 2025, with women facing a steeper rate of 25.4% compared with 16.5% for men.
A Structural Labor Market Gap
Labor market specialist René Quevedo said the figures reflect a structural problem rather than a temporary slowdown. He noted that young people make up 23% of Panama’s workforce but account for about half of the country’s unemployed population, while also representing 55% of the newly unemployed over an 11-month period.
Quevedo also pointed to the scale of public investment in education, saying the state has spent more than $44 billion on education so far this century. Even with that investment, he argued, young people remain disconnected from the labor market in a way that is becoming more severe.
He said the pattern has reversed from two decades ago, when young people accounted for one in four new jobs created by the economy. Today, he said, for every 10 jobs created, three young people lose their jobs.
What the Numbers Show
Quevedo said that in 2025, more than 70,000 jobs were created, but at least 5,000 young people lost their jobs and another 8,000 began looking for work without success. He also said that 54% of youth employment is informal, leaving many young workers outside the protection and stability of formal contracts.
Among those who do enter formal employment, average earnings are about $815 per month, while only 13% reach professional positions with salaries above $1,000. Those figures highlight the limited access young Panamanians have to higher-paying and more stable jobs.
What Economists Are Saying
Economist Luis Morán said the situation is alarming because youth unemployment is more than twice the national average, which stands at 10.4%. He said Panama needs to connect education more directly with work opportunities and strengthen ties between universities and employers.
Morán also emphasized the need for digital skills, entrepreneurship, and new pathways into sectors with stronger growth potential. He pointed to logistics, rural and sports tourism, agribusiness, and creative industries as areas that could offer better opportunities for younger workers.
Both specialists underscored the importance of dual training programs and stronger coordination between the private sector and academia. Without more real job openings, they warned, training alone will not be enough to pull young Panamanians into the formal economy.
Why It Matters
The rise in youth unemployment signals deeper pressures in Panama’s labor market, especially for recent graduates and workers entering adulthood. With a large share of young people concentrated in informal work or outside the labor force entirely, the country faces growing challenges in turning economic growth into stable employment for its next generation.