Introduction

A substantial number of developing countries, particularly in the Middle East and North Africa (MENA) region, are facing a ‘youth bulge’ – a demographic pattern where children and young people make up a large share of the population.[1] While a youth bulge can lead to growth due to demographic dividends, the mismatch between school curricula and labor market demands has resulted in high unemployment rates among MENA youth. In the 2000s, the issue of youth unemployment in the MENA region was under intense discussion, with policymakers scrambling to address the lack of job opportunities for the influx of young jobseekers. However, despite efforts to remedy the situation, the region “failed to improve employment outcomes for its youthful population.”[2] The situation today is no different and has instead been exacerbated by a string of crises over the years. Thus, there is “an urgent need to assess past policy failures” and “reenergize efforts to address the youth employment challenge.”[3]

As of 2015, around 80 million youth (15-24 years) were living in the MENA region, a number that is expected to reach 100 million in 2030 and 104 million in 2050.[4] The economic development of some countries in the region – such as Egypt, Algeria, Saudi Arabia and other Gulf countries – is critically challenged by the youth bulge. Though there is a noticeable contrast in unemployment rates between GCC and non-GCC countries, there is still a need for economic diversification to develop employment opportunities for youth and minimize gender disparities in the labor market. Economic growth nurtures political stability and national security, which relies mainly on providing employment opportunities, education, healthcare, and affordable housing to this growing segment of society.[5]

Unemployment issues in the MENA region

The majority of MENA countries have a surplus of labor. The resource-poor countries of the region, including Egypt, Jordan, Lebanon, Mauritania, Morocco, Tunisia, and the Palestinian Authority, are home to nearly 50 percent of the Arab population and face the challenge of creating jobs, building diversified economies and promoting sustainable growth.

Tackling increasing unemployment is a long-standing but highly pressing challenge for MENA countries. Around the globe, the period of youth unemployment is mostly shorter than that of adults, indicating that youth are inclined to switch jobs more frequently. However, in most MENA countries, youth unemployment is likely a consequence of “waiting for the right job”. As a result, periods of unemployment can be extended, particularly for educated youth, who might need a longer time to find a more desirable job that matches their skills. This is a key point since the duration of unemployment, not its occurrence, is most damaging to human capital accumulation.[6]

According to the International Monetary Fund (IMF),[7] infant mortality rates in MENA countries have significantly decreased over the past 50 years. Low infant mortality and high fertility rates between 1950 and 1980 resulted in rapid population growth, contributing to rapid labor force expansion from 1970 to 2000, and beyond. The significant and ongoing level of youth unemployment has also been mostly caused by skill mismatches, dominant public sectors, surging labor force, high reservation wages, and rigidities in the labor and product markets.

Surprisingly, because educational institutions and job markets are not well matched, highly educated persons are more likely to stay unemployed. In most Arab countries, the issue of skill mismatch has taken center stage in policy discussions.[8] Skill mismatches could potentially have severe financial consequences for people, businesses, and communities. Many of the skill mismatches today result from students’ lack of awareness of labor market needs and potential job opportunities available to them. For instance, the agriculture industry is regarded as an economic priority and offers huge job prospects, however, there is an evident lack of agricultural technical schools due to low demand by students.

In earlier decades, educated people often found themselves working in the public sector or for the government. However, with an already overburdened public sector and a rise in the young population, this approach cannot be perpetuated any longer. The Gulf states’ need for labor from MENA nations, like Egypt and Algeria, has also significantly decreased due to the drop in oil prices and the reallocation of funds to military spending.[9] Countries with low levels of political stability like Algeria, Libya, Iraq, or Yemen may be affected negatively by the demographic transition, which will further exacerbate the social and economic unrest that already faces these countries.

Challenges facing MENA youth

One significant challenge for the region is the dwindling number of business start-ups. Data from the World Bank Group Entrepreneurship Survey (WBGES) suggests enormous differences in firm entry across region and income groups.[10] On average, high-income countries register around four new businesses per thousand working-age people (15-65 years). In contrast, MENA countries inscribe merely 0.63 new firms – ahead only of sub-Saharan Africa. The data significantly differs from country to country; Tunisia and Oman have the highest entry rates in the MENA region, with more than one entry for every one thousand people of working age. The business performance, however, of some MENA economies for which records are available is less than that of the major emerging and developed economies.[11]

According to the World Economic Forum’s 2020 Global Gender Gap Report,[12] the region has made considerable progress in enhancing women’s education. Nearly all MENA countries have closed the gender education gap by 90% in the past decade. However, these educational advances do not harmonize with comparable increases in women’s participation rates. As of 2010, about 33% of working-age women entered the labor market, compared to 56% in moderate and low-income countries and 61% in OECD member countries.[13] Compared to other GCC countries, Saudi Arabia has a higher unemployment rate for women. As of late 2018, only 20% of Saudi adult women were employed or actively seeking work. Meager female labor force participation and low employment rates are missed economic development and growth opportunities.[14]

Another critical challenge for the region is bloated public sectors, comprising government bodies and state-owned companies, which employ a sizable portion of the labor force. Public sector employment varies from 22% in Tunisia to around 33–35% in Syria, Jordan, and Egypt.[15] In the MENA region, the public sector works as a magnet for young graduates attracted by increased salaries, job security, and unique social status, especially in state-owned companies. The stance of the public sector as a priority employment target can incentivize individuals to gain knowledge and skills in fields that are required by that sector, thereby decreasing the number of qualified, eligible candidates for the private sector.

The MENA region has held the highest youth unemployment rates in the world for the past 25 years, crossing 30% in 2017.[16] Moreover, it can take MENA youth years before finding a suitable employment opportunity, which slows the transition to work, impacting other pathways to adulthood including home ownership, marriage, and public contribution.

During the past decade, a series of crises have increased youth unemployment in the MENA region, including the 2008 financial crisis, the 2011 Arab Spring uprisings, armed conflicts, and the outbreak of the Covid-19 pandemic.[17]

Developing nations were severely impacted by the global financial and economic crisis of 2008. With 75.8 million young people worldwide without jobs in 2009, the global youth unemployment rate saw its highest yearly increase. There is no doubt that the financial crisis contributed to the Arab Spring uprisings, as the MENA region had the highest youth unemployment rates in the world in 2010 – 25.5% in the Middle East and 23.8% in North Africa. The unemployment rates for female youth during this time period were even more shocking, reported at 39.4% in the Middle East and 34.1% in North Africa [18]

The Arab Spring uprisings were largely triggered by the disillusioned youth who were frustrated with corrupt governments and unemployment. After the Arab Spring in 2011, the quality of life decreased even more, only to rebound in the three years that followed. However, life satisfaction has fallen precipitously since 2015, contrasting dramatically with the rest of the globe, where life satisfaction has improved.[19]

The Covid-19 pandemic that struck the whole world in 2020 has also had severe repercussions for the MENA region and has further exacerbated the already dire situation. Due to many simultaneous shocks due to the pandemic, such as disruptions to world supply chains, drops in both domestic and global demand, and low oil prices, the region was dragged into severe economic turmoil. This ultimately led to job losses, further exacerbating the already high unemployment rates in the region.

Aside from the aforementioned crises, another critical challenge facing youth is the trouble transitioning from student to job seeker. While the surroundings of education and employment are continually changing due to the pandemic, finding a solution has not been simple. Youth in the MENA region are trying to manage their education from a home-based learning environment while realizing that they need to prepare for an office-based or remote employment role.[20]

Current situation and recommendations

The situation calls for bold reforms which show a willingness to build better futures and improve the prospects of millions of civilians. Government agencies, international organizations, the private sector, non-governmental organizations, research institutions, trade unions, donors, and other stakeholders must all collaborate more effectively to address youth unemployment, with leadership from all fields.

Some MENA governments have tried to formulate national youth policies, often through youth and sports ministries, with little power to implement them. These strategies must be combined with national action plans establishing clear roles and responsibilities for government agencies and other development actors. It is important to support youth-led organizations that collaborate with the government, as shown in instances like the Federal Youth Authority in the United Arab Emirates and the All Jordan Youth Commission, which promote the empowerment and involvement of young individuals in crucial sectors.

Political involvement can only be appreciated, but the legacy of the Arab Spring is not at all consistently positive. Proactive policymakers should target youthful energy toward goals that have better outcomes for everyone.

Conclusion

One of the critical issues facing youth in the MENA region is unemployment and lack of job opportunities, which puts more strain on social security and stability. As a result of the growing youth population and the demographic imbalance, higher unemployment rates seem inevitable. The region is now more susceptible to all types of catastrophes as a result of these developments. Long stretches of unemployment among the younger generation lead to discontent and the possibility of social unrest, endangering the political stability of the region and its neighbors.

Young people should be seen as catalysts for development rather than passive beneficiaries of employment. Young people have the potential to shape the favorable landscape of the global economy as well as social, cultural, technological, and political development. Benefiting from the potential of young people requires qualifying young people for the labor market and crafting an integrated and targeted approach. Such an approach considers diversity and the characteristics of young people, which need to be considered as much as the diversity of labor markets.

[1] Justin Lin, “Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?” World Bank, January 5, 2012, https://bit.ly/3BQyHBT.

[2] Nader Kabbani, “Youth Employment in the Middle East and North Africa: Revisiting and Reframing the Challenge,” Brookings Institution, February 26, 2019, https://www.brookings.edu/research/youth-employment-in-the-middle-east-and-north-africa-revisiting-and-reframing-the-challenge/.

[3] Ibid.

[4] UNICEF, MENA Generation 2030: Investing in Children and Youth Today to Secure a Prosperous Region Tomorrow, April 2019, https://www.unicef.org/mena/media/4141/file/MENA-Gen2030.pdf.

[5] Sabahat Khan, “MENA’s Youth Bulge Is a Regional Security Challenge,” The Arab Weekly, February 4, 2018, https://thearabweekly.com/menas-youth-bulge-regional-security-challenge.

[6] Masood Ahmed, “Youth Unemployment in the MENA Region: Determinants and Challenges,” International Monetary Fund, June 13, 2012, https://bit.ly/3QsDrlP.

[7] Ibid.

[8] Ahmed El Ashmawi, “The Skills Mismatch in the Arab World: A Critical View,” British Council, https://www.britishcouncil.org.eg/en/symposium/thought-pieces/skills-mismatch-arab-world-critical-view.

[9] Ralf Roloff, Nicolas Fulghum, Henrik Simon et. al., “Demographic Change and Youth in the Middle East and North Africa (MENA) Region: Issues of Human or National Security,” George C. Marshall European Center for Security Studies, August 2018, https://www.marshallcenter.org/en/publications/security-insights/demographic-change-and-youth-middle-east-and-north-africa-mena-region-issues-human-or-national.

[10] Anthony O’Sullivan, Marie-Estelle Rey and Jorge Galvez Mendez, Opportunities and Challenges in the MENA Region, Organisation for Economic Co-operation and Development (OECD), https://www.oecd.org/mena/49036903.pdf.

[11] Ibid.

[12] World Economic Forum (WEF), Global Gender Gap Report 2020, December 16, 2019, https://www.weforum.org/reports/gender-gap-2020-report-100-years-pay-equality/.

[13] O’Sullivan et. al., Opportunities and Challenges in the MENA Region.

[14] Valentine M. Moghadam, “COVID-19 and Female Labor in the MENA Region,” Middle East Institute, June 8, 2021, https://www.mei.edu/publications/covid-19-and-female-labor-mena-region#_ftn27.

[15] O’Sullivan et. al., Opportunities and Challenges in the MENA Region.

[16] Kabbani, “Youth Employment in the Middle East and North Africa.”

[17] Ibid.

[18] United Nations, Youth Employment: Youth Perspectives on the Pursuit of Decent Work in Changing Times, World Youth Report (New York: United Nations, 2011), https://www.un.org/development/desa/youth/world-youth-report/world-youth-report-2011.html.

[19] Kabbani, “Youth Employment in the Middle East and North Africa.”

[20] UNICEF, “Young People Address Challenges and Explore Opportunities of Transition from Learning to Employment in the Middle East and North Africa/Arab States Region,” May 23, 2022, https://www.unicef.org/mena/press-releases/young-people-address-challenges-and-explore-opportunities-transition-learning.