Youth Unemployment in Egypt
KeywordsLabor Market Informal Economy Youth Unemployment Arab Region Youth Employment
Youth unemployment in Egypt is a central policy issue. Egypt has witnessed heightened political mobilization of young people in 2011, as part of what has been described in the media as the “Arab Spring.” Youth employment issues are key in this context. Particularly as young people constitute the majority of the unemployed in Egypt. There is also a high prevalence of unemployment among youth, particularly the young women and the educated.
In order to understand the issue of youth unemployment in Egypt, it is good to start with how unemployment is generally defined. The International Labor Organization (ILO 2013: 56) defines unemployment as referring to persons of working age (defined as starting age 15 in Egypt) who are “not in employment,” actively “seek employment,” and is “available” for work. Employment statistics are drawn from household labor surveys from nationally representative samples. In Egypt, the labor force survey is conducted four times a year by the Central Agency for Public Mobilization and Statistics (CAPMAS).
The youth unemployment rate in Egypt is 15.7 % according to a recent ILO report that builds on data from CAPMAS (Barsoum et al. 2014). This statistic refers to the proportion of unemployed youth aged 15–29 to those in the workforce (both employed and unemployed) from the same age group. While youth as an age group is commonly identified as those between the ages 15–24, youth labor statistics usually take into account the fact that education could extend beyond the age of 24 and hence extend the analysis to include those aged 29 in order to capture post-education employment experiences. Another important statistic is the percentage of the unemployed to the general population. The unemployment-to-population rate for those aged 15–29 in Egypt stands at 8.5 % (ibid.). This figure shows that roughly one in twelve young people in Egypt is unemployed. Similarly, the rate of those not in employment, education, or training, dubbed by the ILO as NEET group, is a large group in Egypt and reaches almost one third of youth in Egypt (29 %) (ibid.).
There are a number of key characteristics of unemployed youth in Egypt. First, unemployed youth are primarily from the educated. The above-cited ILO report shows that 44 % of unemployed youth had a tertiary education degree. Young people with vocational secondary education completion degree also constitute 38.4 % of the unemployed (ibid.). These two groups of educated youth, therefore, constitute more than 82 % of the unemployed. This explains the political importance of the youth unemployment issue, for touching on the welfare on the politically volatile group of the young and educated. Second, young women constitute a very large proportion of the unemployed. The unemployment rate among young women is at a high of 38.1 %, to be compared to 6.8 % among young men (ibid.). Similarly, the unemployment-to-population ratio is 11.9 % among young women, to be compared to 5.2 % among young men (ibid.).
There are many reasons for the high youth unemployment rate in Egypt. First and foremost, the level of economic growth in the country did not match the demographic pressures of having an increasing number of new entrants to the labor market from the youth every year. Population pressures, not matched by adequate economic growth, remain a key factor to youth unemployment in the country. However, the youth unemployment problem in Egypt and in the Arab region in general is often described as a structural problem. This analysis, best postulated by Assaad (2008, 2014), relates youth unemployment to the duality of the economy in Arab countries, where there is a formal economy predominantly represented by the public service and state-owned enterprises and a large informal economy populated by small- and microscale enterprises. The job characteristics and level of benefits widely vary between the formal and informal economies, making it highly desirable among young entrants to seek jobs in the public service and state-owned enterprises (Barsoum 2016). Jobs within the informal economy are commonly characterized by lack of benefits such as access to written work contracts, social pension schemes, health insurance, or work and income stability. Research has also shown a wage gap between the formal and informal economies in favor of the former (Said 2015). This disparity induces many young people to queuing for the fewer number of jobs in the formal economy.
The desirability for jobs in the public service and state-owned enterprises among the youth is a reflection of an historical legacy that dates back to the socialist policies of the 1960s in Egypt. In 1962, higher education was promulgated as a free right in Egypt similar to the pre-university stages. In the same year, a guaranteed employment scheme for graduates of secondary education and above. These policies widened access to post-secondary education. However, the guaranteed employment scheme was an unsustainable economic policy, leading to the bloating of the public service sector and a prolonged wait period for jobs among graduates. The scheme had to be eventually stopped with the implementation of economic reforms and structural adjustment policies in the early nineties. Assaad (2008) relates the high youth unemployment in Egypt to the high expectations for public employment engendered by the government’s employment guarantee policy. However, public sector hiring continues after the scheme has been relinquished, following a new modality of hiring competition. The disparity between work characteristics in the private sector and the public sector leads to a situation where applicants to public sector jobs far exceed demand, opening way for nepotism and cronyism in hiring.
Gender is a key determinant of unemployment status in Egypt. As the above-stated statistics show, unemployment is much more prevalent among young women than among young men. In absolute numbers, the number of unemployed young women is more than double that of unemployed young men (1.3 million young women as opposed to 0.6 million young men) (Barsoum et al. 2014). Among the NEET category, 49.5 % of young women belong to this category to be compared to 9.3 % of young men (ibid.). The face of unemployment in Egypt is, therefore, that of young women. While gender is a key determinant of youth unemployment in Egypt, it is also important to remember that Egypt has one of the lowest rates of female labor force participation in the world, hovering around 26 % according to Egypt’s central statistical bureau, CAPMAS. One of the key arguments about gender disparity in Egypt and the Arab region in general is that while women have made significant strides in access to education, this did not translate in greater labor market participation. A number of studies have looked at the challenges facing women in joining the labor market. While some arguments have highlighted the specifity of cultural constraints to women’s employment, others have taken a deeper look into issues related to the structure of the economy and available opportunities. Moghadam (2001) postulated the impact of oil remittances, which has been reflected in Egypt through remittances from migrant labor, on reinforcing a vision of women as homemakers. Similarly, a report by the World Bank (2013) argued that the presence of large public sectors in the Arab region, including in Egypt, heavily distorted the labor, capital, and product markets. Among young women, the public service remains a preferred employer for its relatively generous package of maternity leaves, availability of leaves without pay, work stability, and shorter working hours compared to the private sector. Given the high competition for public service jobs as discussed earlier, this largely contributes to the high unemployment rate among young women.
There are a number of commonly identified challenges facing male and female youth in entering the labor market and contributing to increasing the unemployment rate. These challenges can be categorized as (1) pertaining to the limited skill base of these new entrants to the labor market, (2) job matching and labor market information deficiencies, (3) limited access to finance for entrepreneurial support, or (4) the lack of employment opportunities. First, the limited skill base of unemployed youth can be related to problems in the education systems and its inability to prepare its graduates with the relevant skills needed in the labor market or early school dropout. Access to soft and portable skills, such as the ability to communicate effectively, has been identified as a key challenge to these new entrants to the labor market. Second, the limited access to labor market information about employment opportunities, particularly for youth in poor and remote areas, is also another key challenge. Young educated youth in remote rural areas face this access to information problem and are hence unable to apply to available vacancies elsewhere. Third, the limited access to finance for entrepreneurial support is also a key challenge and inhibits the entrepreneurship potentials for young people. In fact, research shows that young entrepreneurs in Egypt have to rely on family resources due to limited financing opportunities. Fourth, the lack of employment opportunities challenge is also more prevalent in remote and poor areas, particularly for educated rural youth. This group is faced with contracting employment opportunities in agriculture and the mismatch of their education to their rural settings.
Many state and civil society initiatives have taken place in Egypt to address youth unemployment. The Youth Employment Inventory (youth-employment-inventory.org) includes more than 180 interventions implemented in Egypt for youth employment (Barsoum 2016). These initiatives are implemented by a large number of state and non-state actors with support from international donor organization along with the private sector and local civil society organizations. The inventory groups the interventions into those addressing the skill gaps, those addressing job matching problems and information asymmetry, and those addressing lack of employment opportunities and access to finance. The first group of initiatives is aimed at skill building through second-chance programs for youth who did not complete their education or at providing soft and technical skill training to young people. Modalities of implementation include classroom settings, internships, or on-the-job training. The latter approach is known for being more effective. The second group of initiatives seeks to promote entrepreneurship, not only through access to finance but also through mentorship, entrepreneurship training, or business grants. The third group of initiatives seeks to provide employment services in order to address the information asymmetry among unemployed youth. Programs in this category provide job search assistance and counseling, job placement services, and even financial assistance to search for jobs. The fourth category includes services in the context of subsidized employment such as public work projects, wage subsidy programs, or employment in public service. This last category is mainly provided by the state.
The movement of labor, particularly youth international migration, is a global challenge that has its roots in the high unemployment prevalence among this group in countries in the South. In fact, Barsoum et al. (2014) show that more than half of employed youth expressed their dissatisfaction about their jobs and their willingness to seek employment in other countries. A survey of youth in Egypt, the Survey of Young People in Egypt, which was conducted by the Population Council (2010), shows that one in three young men in Egypt expressed willingness to migrate. Employment opportunities are the key reasons for these young people to seek migration.
The issue of youth unemployment in Egypt, while significant, needs to be contextualized and understood in relation to other employment data. As the above discussion of the informal economy and work expectations shows, employment characteristics matter in increasing unemployment rates, job dissatisfaction, and willingness to migrate. Interventions to support youth labor market insertion must be multifaceted, combining different models. Interventions to support youth employment require concerted efforts and government engagement of the private sector and civil society organizations. Youth should be active partners in the design and implementation of these programs.
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