To tackle the challenges and negative impacts of long-term youth unemployment, UNDP together with Finnish Innovation Fund Sitra and the Government of Serbia is designing a Youth Employment Bond pilot with the Social Impact Bond (SIB) mechanism.

Social Impact Bond is a result-based financial instrument for impact investing, where private investments are intended to create a positive social or environmental impact as well as a financial return. The first SIB was launched in 2010 in UK and by now over 60 SIBs have been commissioned across Europe, Australia, Canada and the United States. SIBS have raised over $200m of capital and touched over 90,000 lives in the areas such as employment, homelessness, health, child welfare, education and criminal justice.

SIB modality reduces the funding risk of public sector as the outcome payers agree to pay and reward investors only if outcomes are achieved. Thus taxpayer's monies will be invested only in programs that have measurable impacts and that either create savings or improve social welfare.

The project will include young people (15-30 years) who have been unemployed for more than a year with multiple risk factors for continued unemployment. The aim is to provide employment support services that are currently missing and match the needs of the employees and employers.

Working young people means less social benefits and more income taxes – thus savings for government, which will enable the Bond to pay back to investors. Jobs, savings and return – all in one!