Interview with Ragui Assaad on The Middle East Youth Bulge: Causes and Consequences

The challenge facing young women in the Middle East and North Africa are in fact enormous. Not only are their numbers unprecedented with the onset of the youth bulge phenomenon, they are increasingly educated, as the gender gaps in education disappear, and in fact reverse in many cases. They are also marrying later, leaving them plenty of time between finishing school and getting married to enter the workforce and start a career.
The challenge is compounded by the fact that in many countries of the region significant economic restructuring has occured away from a state-led economy toward a more market oriented system. While this may have led to faster economic growth and more efficient production structure it has negatively affected the status of women in the labor market.
It is well established that the public sector is fairly egualitarian in its hiring, with little differentiation between men and women, so long as they have the requisite educational certificates. Private sector firms, on the other hand, in most of the countries of the region, are reluctant to hire women, except in a fairly narrow set of occupations and activities. This entry discrimination against women in the labor market results in a significant wage gap in the private sector in favor of men, even when qualifications and experience are taken into account. The withdrawal of the public sector as a major employer has thus resulted in a narrowing of opportunities for educated women in wage and salary employment, leading many educated young women to simply withdraw from the labor market. We thus notice that in a number of countries, participation rates for educated young women are falling in line with the drop in their chances of obtaining public sector employment.

Resolving these challenges is not going to be easy. Opening up the private sector labor market to greater female participation requires some legal changes like changing laws and regulations that impose significant costs on employers who hire women, including paid maternity leaves, long unpaid leaves for child rearing, etc. Although, these are necessary benefits, they should not be imposed on employers, but, instead covered through the social insurance system. These aren't the only obstacles to female employment in the private sector, but addressing them would be a start. Evidence indicates that countries that engage in the export of manufactured goods, such as ready-made garments, processed foods, and electronic assembly do better in terms of female participation in private sector activity. Morocco, Tunisia are good examples of that in the region.

To sum up, one of the biggest challenges facing the MENA region now is that most countries have succeeded in closing the gender gap in education, but most still have serious obstacles in the labor market that prevent these women from making use of their abilities in the economy.

Rising oil prices could either be a blessing to the countries of the region or a curse depending on the way the new-found wealth is managed. If high oil prices will lift the pressure toward necessary reforms by filling the coffers of the government and reducing the urgency for change, they could have a fairly negative effect. If on the other hand, the new-found wealth is used to help compensate losers and make the introduction of reforms easier, then they could be a blessing.

What are the necessary reforms? First, there has to be a virtual overhaul of the education system away from a system producing credentials to qualify people for public sector employment to one that imparts young people with real skills to be productive in an increasingly globalized economy. This means moving away from rote memorization to more cognitive skills, more problem solving, more research and communications skills. The education system also needs to be more responsive to the needs of an increasingly privatized economy. This means giving young peopple and their parents more choice over what schools they go to, what fields to enroll in and making schools more accountable to the community.

Second, the move away from guaranteeing employment in the public sector for educated youth must be consolidated. Although this has led to the formation of a large middle class in many countries, it has greatly distorted the labor market and the education system by emphasizing credentialism rather than skills. It has also raised expectations and encouraged queuing for public sector jobs, leading MENA to have the highest unemployment rates in the world.

Third, we need to develop a wide range of opportunities for skills development outside the formal education system. These new opportunities need to be market-oriented to respond to real needs and have significant involvement of the private sector in their provision. However, they need not be totally privately financed. Public financing can be used in judicious ways to support these market based opportunities.

Returning to political instability, we need to realize that while it is true that some political instability is imposed from the outside as a result of geo-political conflict and competition over resources, conflict and instability are also often the result of demographic pressures that are not adequately addressed. The presence of large numbers of underemployed and frustrated young men, with potential access to weapons, is often a recipe for civil conflict. Thus the youth bulge could provide significant demographic dividends, but if not dealt with with the right policies, could result in political instability and civil conflict.

The youth bulge is a natural stage in the demographic transition that nearly all societies have gone through. The demographic transition is the process by which societies go from a situation of high fertility-high mortality to a situation of low-fertility, low-mortality. The first stage of the transition involves falling mortality, while fertility remains high. That stage is characterized by very high population growth as more children survive early adulthood and fertility rates remain high. Eventually, fertility begins to decline and the number of children starts to stabilize. That stage of the transition, after the onset of fertility decline, is the period characterized by a youth bulge. The large cohort of young people born during the previous phase form an increasing share of the population, a phenomenon we call the youth bulge.

For now, and for the foreseeable future, the youth bulge is leading to the largest cohort ever to enter the labor market. Once they make it into the labor market, they will contribute to a period of falling dependency ratios. During this period the number of working age individuals relative to the size of the population increases, leading to what is referred to as the demographic dividend. It will take about 40 years for the youth bulge to actually turn into a demographic burden and a smaller workforce as the members of the youth bulge cohort start to retire. This would be similar to the retirement of the baby boom generation that was born in the two decades following the Second World War in the US and Europe. It took about forty years for that generation to reach retirement age. Countries in the MENA region will have to worry about that sort of "greying" of their populations, further on in the future. Now the challenge is to absorb the growing labor force into productive employment to realize the demographic dividiend.

Jane, I've addressed this question to some extent in a previous answer. There is no question that the challenge of the youth bulge is compounded by a heavy legacy from the past. The peak of the youth bulge in the MENA region, which is about now, is coming at a time of major shifts in the economy, which increasingly requires skills relevant to a competitive globalizing world economy. The education and training system of the region, however, have yet to experience much restructuring, along those lines. They are still oriented toward the production of credentials rather than skills. Job markets had been dominated by the public sector, which reward these educational credentials. Now, the growing private sector in most countries is not willng to pay more for formal educational credentials unless they translate into productive skills, leaving a lot of young people with worthless human capital investments.

The private sector is also unwilling to give young new entrants the sorts of job security and social protections that the public sector used to provide, thus the proliferation of informal employment. Young people will have to reduce their expectations about getting secure lifetime employment and accept a reality where they will need to progress in the labor market through many jobs over their careers, where they gradually accumulate experience and skills

I'm not really an expert on cultural matters, but I can see things moving in two directions. In some countries, such as Iran and Saudi Arabia, where the state is imposing a certain cultural orthodoxy, I can see that the reaction of some young people would be to reject these cultural values. In other countries, young people may be tempted to express their frustration at their poor life prospects by emphasizing religion and traditional values.

In either case, my feeling is that states need to provide space for debate and dissent outisde the religious realm. They should also promote tolerance of different ways of behaving and thinking. Enforcing cultural orthodoxy will not work, just as denying people the right to express their religious identity often backfires as well.

You are quite right that in many, but not all, Middle Eastern societies a reverse gender gap is developing in education. when it occurs, the reverse gender gap is largest at higher levels of education, especially the univesity level. The primary reason for this is that while education systems have become equally accessible to young men and women, labor markets have not. Women still have much poorer prospects in the labor market, especially in the private sector. Although this can potentially affect the decision to get an education in two opposing ways, in fact, it ends up leading to more rather than less education for young women.

On the one hand, poor prospects in the labor market may lead parents to conclude that it is not worth investing in the education of a daughter since the returns to that investment in the form of future wage income will not materialize. However, much of the return to education for women in MENA does not occur in the labor market, but in the marriage market. As male education rises, educated women are highly prized as wives and mothers who can contribute to building the human capital of their children. Thus education still has substantial benefits.

On the cost side, one of the main costs of an education is income foregone while in school. Individuals give up the ability to make money though work while in school in order to have a higher income in the future. Since women's job prospects are poor, their opportunity cost to remain in school is also low compared to that of men, leading them to stay longer in school. This is especially the case when the age at marriage is rising and women's heavy domestic responsibilities are somewhat delayed.

Eventually, the increasing numbers of educated women will no longer be satisfied with their domestic roles and will begin demanding a larger economic and public role. Such demands are bound to further advance social development in the region.

Besides the large gap in incomes between the populous countries of the Middle East and North Africa and Europe, the contrasting demographic profiles of the two regions provide a very strong impetus for migration. There is a surplus of young people in Egypt, Syria, Morocco, and Yemen and there is strong demand for young workers in Europe to care for an increasingly greying population. In that sense, MENA is no different from countries in Africa and South Asia, but the proximity of many MENA countries to Europe may make the lure stronger.

One should keep in mind however, that there is another set of destination countries in the oil-rich countries of the Gulf. These countries are now relying essentially on South Asia for many of their labor needs, but are increasingly importing young professional from other Arab countries to make use of their language skills. Unskilled workers from MENA generally have few prospects in these oil rich countries at the moment.

What are the policy implications of these migratory flows? First, destination countries need to realize the very powerful economic and demographic forces that are leading to this migration and institute policies that encourage organized and legal temporary migration. Simply closing their doors, will lead to growing flows of illegal migrants, with all the potential for exploitation and endangerment that such flows can create. Sending countries need to negotiate labor exchange agreements to faciliate these legal migration flows. These steps are not easy because of all the cultural and social issues that migration raises, but are necessary if the problem of illegal migration is to be addressed.

There is no question in my mind that fertility decline in MENA was brought about by the improving education status of women and the fall in infant and child mortality rates. Women's education leads to fertility decline in two main ways. The first is delayed marriage, which is a phenomenon that has occurred in all countries where fertility decline has occurred and accounts for a significant fraction of this decline. The second is low desired family size within marriage, and that is related to the desire of more educated women for quality of children vs quantity and is also related to the opportunity cost of women's time outside the home. It is also significantly related to the confidence that one's children will survive, which results from declining infant and child mortality.

Now, for the decline to be realized under these conditions, women have to have the opportunity to control their fertility and this means that states must be supportinve of family planning and make family planning methods readily available. There are a number of cases where this has not happened despite rising education levels among women, like present day Saudi Arabia and Iran in the first ten years after the revolution.

This brings us to Iran, which is a bit of a special case because of the role of the Islamic revolution there. If one traces the path of fetility decline in Iran prior to the revolution, we can see that Iran was on a declining fertility path since the early seventies, caused by the factors mentioned above. The revolution comes in 1979 and makes it extremely difficult for women to control their fertility despite the presence of all the social pre-conditions of fertility decline. This actually results in a temporary reversal of fertility decline and a unique situation of increasing fertility following the onset of fertility decline. Once the Islamic Republic decided to reverse it policies in 1990 and began promoting family planning again, what happened in Iran was an episode of catch up decline in fertility with one of the most rapid episodes of fertility decline in the world. In fact, Iran is now where it would have been had the decline that began prior to the revolution continued at the pre-revolutionary pace without the interruption of the first ten years of the Islamic republic. The moral of this story is that there are very powerful social forces behind the fertility transition that even a powerful socially-conservative revolution could not reverse in a permanent way, but that could only resume once women were allowed the means to reach their desired family size.

The story of the Maghreb is somewhat different. The underpinnings of the decline are still the two factors mentioned above, but the pace of the decline was helped by the higher economic participation of women in the Maghreb, which raises women's opportunity cost of time outside the home and thus the cost of having children.

The prevalence of genital mutilation (FGM) varies significantly across the region. Genital mutilation practically does not exist in the Asian countries of the region, except in the coastal areas of Yemen that are affected by population flows from the horn of Africa. FGM is very common in Egypt and the Sudan and less common in North Africa. So it is essentially an African phenomenon that has spread to parts of the MENA region through the Nile Valley and the Western edges of the Sahara.

There are now significant efforts to eradicate FGM in some countries, most notably Egypt. It is now a public issue and a great deal of public debate is taking place about it. The government has taken a strong stance against it and a law criminalizing it is now before parliament. There is also some evidence that prevalence rates have declined among young women, but the impact of the recent efforts will not really be felt right away.

The economic policy arena in MENA has shifted dramatically in favor of private enterprise in recent years, especially in the formerly socialist countries, such as Egypt, Syria, Algeria, Tunisia, and Yemen. However, much remains to be done to promote the growth of small and microenterprises and lift the regulatory burdens that force them to stay informal and therefore small. Many of the policy changes have favorably affected the environment faced by larger entities and they have been growing rapidly. The reforms needed to improve the business environment for smaller firms are much more painstaking and require a significant improvement in the governance structure, such as reduced petty corruption at varous levels and a more transparent regulatory framework.

Finally, I would like to caution that only a very small proportion of young new entrants will become successful entrepreneurs. The vast majority need to have good opportunities in wage and salary employment in order to be productive members of their societies. Entrepreneurship requires significant skills, experience and market knowledge that most new entrants simply lack.

I actually see this as a very positive phenomenon so long as these universities maintain the same standards of education in these institutions as the ones of the parent institutions. The region needs educational institutions that promote critical thinking, analytical skills, problem solving and competition from these new institutions will induce local institutions to provide these skills. The main caution is that these should not be thought of as money making ventures that provide a cachet but a very different quality of education from that of the parent institution.

Absolutely. The population change poses a challenge to policy and may exacerbate the effect of wrong or misguided policies. If the right policies are adopted, it could actually become a significant asset as it was in East Asia. What essentially needs to be done is to improve the quality of human capital through higher quality of education and insituting policies that make better use of that human capital. East Asia did that by investing heavily in education and by adopting outward oriented, export-led development policies that made good use of the educated youth that were coming on line.

Governments could clearly see this coming, but as you know, they usually have a rather short planning horizon and try to deal with the most urgent problems first. The problem with this is that it is a pretty long-term phenomenon that needs significant advance planning. Most governments in the region are in crisis management mode. This is not specific to the region. Witness the US government's peformance in addressing the crisis of the social security system brought about by population ageing.