MENA’s “Waithood” Syndrome

The Middle East Youth Initiative has recently published “Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East,” a report highlighting the challenges the region faces with providing job opportunities for its growing youth population. The report demonstrates that even during the “boom” years of 2002-2008 young people in the region were afflicted by high unemployment rates. The current economic slump – which coincides with demographic pressures of historically high levels of young job seekers – has only made things worse, raising even more concerns about the future.

“Young people continue to struggle in attaining job-relevant skills and high quality education. They continue to wait for good jobs, enduring long spells of unemployment or spending their most productive years trapped in informal jobs that fail to prepare them for better positions. In turn, young men and women increasingly delay marriage and family formation, unable to meet the costs associated with these life stages. Moreover, since outcomes in these spheres are interdependent, failure in one transition spills over into others, resulting in a debilitating state of waithood, when young people are left waiting to achieve a full state of adulthood.”

Over 25 percent of firms in MENA report the lack of skills among prospective young workers as a major constraint on business growth. In a functioning market economy, employers can signal what skills they need and value, which in turn provides incentives for the youth to acquire those skills. In MENA, however, wage scales offering higher pay in scarce government jobs, coupled with very rigid labor laws, skew those incentives.

The report concludes that “for policy makers, a vital lesson of the oil boom years is that improvements in the macro environment alone will not erase the deep inequities that define the older and younger generations. (…) Without a sound microeconomic foundation—one in which institutions generate the right signals and incentives—the benefits of macroeconomic and trade reforms, as has been demonstrated during these last few years, are limited.” Yet more than just education, employment, or housing policies need to be reformed to help the youth. A redefining of MENA’s long-standing social contract requires a broader and more open public policy discourse that empowers the voices of youth and other excluded groups – and engages the private sector on key reform issues.