Middle East Youth Initiative

1. Middle East Youth Initiative Djavad Salehi-Isfahani Virginia Tech/Brookings/Harvard Kennedy School

2. 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 today’s 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

3. Who are the Generation in Waiting? The region is at the apex of its youth bulge, which has put tremendous pressures on markets such as education, labor, marriage, and housing. Youth between the ages of 15 and 29 (born between 1980 and 1995) represent the largest youth cohort in the Middle East’s history.

4. 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.

5. 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.

6. 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

7. 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

8. 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

9. 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

10. 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

11. Family Formation: Housing Constraints In MENA, housing costs are high at 8 times average annual income—about 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

12. Institutions and Youth Exclusion Why are today’s 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.

13. Institutions and Youth Exclusion in the Middle East How Institutions Effect Youth Exclusion in the MENA Region

14. 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

15. 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.

16. 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.

17. 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