Middle East Youth Initiative

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Middle East Youth Initiative

• Djavad Salehi-Isfahani
• Virginia Tech/Brookings/Harvard Kennedy School

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Introduction and Overview

Who are the Generation in Waiting and why are
they important? What is waithood? Youth
challenges during their transitions to adulthood
Why are todays youth in waiting? How have
countries in the region responded to these
challenges? A new reform agenda Policy
solutions for the youth challenge in the Middle
East and North Africa
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Who are the Generation in Waiting?
Youth between the ages of 15 and 29 (born between
1980 and 1995) represent the largest youth cohort
in the Middle Easts history.

• The region is at the apex of its youth bulge,
  which has put tremendous pressures on markets
  such as education, labor, marriage, and housing.

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Who are the Generation in Waiting?

• The current generation of youth is in some ways
  they are better off than previous generations
• It is healthier and more educated.
• Near universal primary enrollment and increasing
  levels of secondary and tertiary enrollment.
• More equitable distribution of education between
  women and men.

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Who are the Generation in Waiting?

• In other ways, this generation is worse off than
  previous generations
• High rates of unemployment after school
  completion, with long durations of unemployment.
• Young women are gaining more education but face
  widespread exclusion from the labor market.
• Many youth are coming of age in conflict areas.
• Many youth experience delayed marriage and family
  formation.

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Why are they important?

• A large working-age population with fewer
  dependents can be a huge positive force for
  economic growth.
• With smaller families, it can invest more in
  their own children, create a more educated next
  generation.
• As the future middle class, how it sees the
  future is critical for social and economic
  progress.
• Smooth vs. painful transitions to adulthood

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School-to-Work TransitionEducation Access,
Equity and Quality

• Educational expenditures and enrollment rates are
  high.
• BUT quality of education remains low.
• Education systems fail to teach relevant skills.
• Promote credentialism instead of skill
  acquisition

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School-to-Work TransitionEmployment Weak
Outcomes, Long Waits

• Unemployment rises with education.
• Duration of unemployment for new graduates is
  long.
• Young women have lower rates of participation in
  the labor market and higher rates of
  unemployment.

Source Assaad and Barsoum 2007
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School-to-Work TransitionEmployment Declining
job quality for new entrants

• Fewer opportunities in the public sector
• Increased informality one in three jobs are
  informal.
• One in ten jobs are private formal sector jobs

Source Assaad and Barsoum 2007
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Delayed marriage and family formation

• Is delayed marriage driven by lack of resources
  or the desire for more education and lower
  fertility?
• The marriage market is closely linked with the
  employment market, the education market, and the
  housing market.

Source Salehi-Isfahani and Egel 2007
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Family Formation Housing Constraints
In MENA, housing costs are high at 8 times
average annual incomeabout 3 in the US. There
are few instruments to leverage future
earnings. High upfront costs of renting
Source World Bank -IMF 2005
Source Salehi-Isfahani and Egel 2007
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Institutions and Youth Exclusion Why are todays
youth in waiting?

• Previous generations benefited from free
  education, public sector job guarantees
• But for those born in the 1980s and later, these
  institutions are no longer working.
• Demographic pressures have strained public sector
  employment and education systems.
• Even if these institutions could accommodate the
  youth bulge, they are not well suited in a world
  where innovation and entrepreneurship are the
  drivers of economic growth.

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Institutions and Youth Exclusion in the Middle
East
How Institutions Effect Youth Exclusion in the
MENA Region
Sector Institutional Feature Effects on Youth
Education University admissions policies Tracking mechanisms Undermine value of vocational education Promote rote memorization over investment in skills
Labor Market Employment protections Labor laws Protect older workers Make firms less likely to hire new, younger employees (lower turnover) Contribute to informality
Housing Rent controls Absence of mortgage facilities Limit access for first-time buyers or renters Prolong dependency on parents Reinforce failure to accumulate physical assets
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A new reform agenda

• Suggested Policy Proposals for Youth Inclusion
• Reform university admission policies
• Reform public sector hiring practices
• Invest in scaled-up volunteerism and learning
  programs
• Develop local mechanisms/institutions for support
  and recognition of innovation on the grassroots
  level (social entrepreneurship)
• Raise value of informal work
• Provide social protection instead of job
  protection for workers

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Policy Solutions for the Youth Challenge in MENA

• Reforms of the institutional environment
  Increase
• incentives to invest in skills instead of
  diplomas.
• incentives to search for careers instead of
  permanent jobs.
• incentives to build creditworthiness.

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Searching for careers

• Using the informal sector more effectively
• Documenting informal work
• Social Entrepreneurship.
• Social entrepreneurs utilize good business
  practices innovation, financial sustainability,
  and efficiency to fill market gaps and
  failures.
• In the right environment, these solutions are
  tested and adopted by established institutions,
  creating long-term and scaled up benefits.
• By empowering young people to identify market
  opportunities in solving pressing social
  challenges, social entrepreneurship can also
  play an important role in changing mindsets.

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Thank you!

• Middle East Youth Initiative
• www.shababinclusion.org
• Dubai School of Government
• www.dsg.ae
• Wolfensohn Center for Development Brookings
• www.brookings.edu/wolfensohn.aspx