Report

After the Arab Spring / Youth unemployment still the most urgent challenge

Across the region, economic growth has fallen since 2011. In Egypt, Syria and Tunisia, and to a lesser extent, Lebanon, it happened mainly as a result of political instability. Since young people occupied Tahrir Square in Cairo, Egypt’s economy, the region’s largest, has shrunk by 7% and exports have fallen by around 40%, while the value of imports has increased due to higher commodity prices.

The most dramatic fall was in the number of tourists and tourism revenues in Tunisia and Egypt, with reductions of 36% and 40% respectively. Foreign direct investment fell by more than 40% for projects in Egypt, Jordan, Lebanon and Tunisia, and the economy came to a halt in Syria. The remittances from expatriates decreased due to recession in Europe and the forced return of tens of thousands of Egyptian and Tunisian workers from Libya. Egypt, Morocco and Tunisia , the countries with manufacturing industries whose export markets are in the EU, were also hit by the crisis in Europe.

The prospects of Algeria and Libya, as energy exporters, depend on the fluctuations of international oil and gas prices, which are currently favourable. Morocco is the only country in the region that weathered the global economic crisis and regional political turbulences well, retaining its pre-crisis growth rates. Some recovery is made in Tunisia, Libya and Egypt, but Syria poses serious political and economic risk to the neighbours.

Beyond short-term growth, the biggest challenge is that the region’s economies do not create enough jobs, especially for highly skilled workers. Even in the period from 2002 to 2007, high sustained economic growth brought only weak demand for new labour. What affects job creation is the business environment dominated by micro, small and medium-sized enterprises, and high agricultural employment in some countries. Of the 4.8 million formal enterprises in Algeria, Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia, 98% employ fewer than 50 workers.

Socio-economic inequality is a serious development challenge

Gauging by education, health, land ownership and political participation, the region is among the most gender-unequal in the world. No country makes it into the top hundred in the 2012 WEF Global Gender Gap report. Women’s education levels have improved substantially, but have not led to higher activity and employment rates.

Poverty is the reality for many. Depending on whether the poverty line is set at USD 2 or 3 a day, from 45 to 92 million people live below it. Some 30–40% of workers are in so-called vulnerable employment according to the ILO, while the working poor make up 11% across the region. They include unpaid family workers (especially women in rural areas), informal workers, self-employed and subsistence farmers.

Highly segmented labour markets reduce policy impact and obscure reforms

The low labour market activity rate (40%–50%) and high unemployment (10–15%) led to an extremely low level of total employment: on average, less than one working-age person in three has a job. The main reason is very low female activity rates – less than 25%. Most of them work in agriculture (unskilled workers) or public sector (high-skilled). This situation imposes a major constraint on economic development .

Labour markets are segmented along public, modern private and traditional private (informal) lines and by gender and education. In some countries the state is the main employer accounting for 30%–40% of jobs in Egypt and Jordan, nearly 50% in Palestine and Algeria and 70% in Libya.

Youth unemployment still the most urgent challenge

In 2011 only one in three young people was in the labour market – either employed or unemployed – while world’s average is 50% according to the ILO. Another third of youth is estimated to be in school, while the remainder is neither in education or training nor in the labour market. Still, the region has the highest average rate of youth unemployment in the world (25%), Tunisia tops the list with 42% of active young people unemployed. The rate is at least twice as high as the rate for adults and has not come down over the past 10 years (Figure 4).

Youth unemployment disproportionally affects young women whose unemployment rates typically double the average. Job opportunities are rare for young men and almost non-existent for young women, as most employers openly give preference to male job-seekers. Some employers do prefer female workers, but the jobs which they offer are low-skilled and low paid, and hence not attractive to the few educated women seeking employment.

The inverse correlation between education and employment in the region is a striking feature. Unemployment rates tend to increase with education level, especially for women. In Tunisia, the unemployment rate of university graduates is 29%, while for secondary education graduates it is 20%. ‘Educated unemployment’ reveals the weak links between the education and training system and labour market and the major difficulties of youth transition from school to work. Despite increasing education levels, the transition from school to work is taking ever longer as economies create few jobs for skilled workers. This is linked to the model and stage of economic development, but also to the rigid labour market structures and employability deficits. Among the problems in education and training is a strong preference for humanities disciplines, few young people opting for vocational education and training (VET), and strong gender segregation in VET occupations. Graduates lack generic and soft skills, including ICT, foreign languages, communication and social skills, critical thinking, and work discipline.

According to the World Bank, 42% of private enterprises in the region point to the formal schooling system that does not respond to their skills needs as the main obstacle to hiring young people. The mismatch is particularly high in Lebanon (56%) and Egypt (50%).

Young people’s attitudes to work and their high expectations for professional life are important factors. In Algeria, Egypt and Jordan young people refuse to engage in VET programmes. Those who can afford to, will turn down manual work or jobs in craft professions. Even graduation from a prestigious VET centre, a step that opens up good employment prospects, is used to enter university. So, in a way, the unemployment of some university graduates seems voluntary.

Young people who are not in employment, education or training (NEETs) are particularly vulnerable to social exclusion. Although no statistics are available, surveys in some countries show that this category might account for more than 40% of the youth population. High numbers of early school leavers and social norms that restrict mobility and access to work and the further education of young girls partly explain this phenomenon. So, being “NEET” is usually out of the control of a young person.

Capture d’écran 2013-11-22 à 13.19.30

Chosen excerpts by Job Market Monitor. Read the whole story at 

Capture d’écran 2013-11-22 à 13.17.18

via Employability In The Mediterranean Region 

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