Youth unemployment remains a significant global issue, with young people consistently overrepresented among the jobless. With more than 64 million unemployed youth worldwide and 145 million young workers living in poverty, youth employment remains a global challenge. This issue is particularly pronounced in the Arab world, which has the highest youth unemployment rates globally, contributing to widespread frustration and social unrest. The impact of youth unemployment and poor job quality was evident in the revolts of 2011 and 2018. The European Union also grapples with high youth unemployment rates, especially in countries like Spain, Portugal, Italy, and Greece.
The consequences are profound. Unemployed youth are more susceptible to radicalization, social unrest, brain drain, and migration. Both regions risk losing their demographic dividend, which could lead to long-term economic stagnation.
Youth Unemployment in the Arab region: A Deepening Economic and Social Challenge
Economic growth in the Arab region has been sluggish over the past two decades, characterized by limited job opportunities and increasing youth unemployment. For more than 25 years, young individuals (ages 15-24) in the Arab world have experienced the highest unemployment rates worldwide, averaging around 25% and peaking at 30% in 2017, significantly higher than the global average of 13%. Thirteen countries within the region report youth unemployment rates exceeding 20%, with Libya nearly 50%, Jordan exceeding 40%, and Algeria and Tunisia reporting rates above 30%. Additionally, the number of young workers entering the labor market continues to grow. The population in this region is expanding at nearly double the global rate, with one-third of its inhabitants under the age of 15, leading to an increasing number of job seekers.
In the Arab region, youth employment faces significant gender disparities. Despite substantial educational advancements by young women over the past fifty years, their labor market participation remains low, exhibiting the lowest female labor force participation rate worldwide, at 19.5%. Furthermore, the unemployment rate for young women in the region is 80% higher than that of young men, far exceeding the global average gender gap of 20%, highlighting the significant obstacles young women in the Arab region encounter when trying to join and stay in the workforce.
Young individuals often spend years looking for a job, which can postpone essential life events like marriage, homeownership, and civic engagement. This situation, termed “waithood,” reflects the waste of youthful energy and potential. The high rates of youth unemployment and the phenomenon of “waithood” stem from various factors.
In the Arab region, this includes rapid population growth, ineffective education systems, political instability, and a disconnect between the expectations of job seekers and available jobs. Additionally, the private sector’s contribution to national output is small, with the public sector serving as the predominant employer in numerous nations. Although the value of entrepreneurs and SMEs is acknowledged, the public sector continues to take in excess labor, especially among university graduates, representing 60-80% of formal employment in various Arab countries. Furthermore, rigid labor market regulations hinder job creation and concerns about the inability to dismiss employees during economic downturns further worsen the situation. Cultural and legal biases against young women, misaligned educational and training initiatives, and significant obstacles to private sector growth and entrepreneurship—such as excessive regulation, corruption, and limited access to financing, mentorship, and networks—add to the issue’s complexity.
In Europe, rigid labor market regulations, high minimum wages, and extensive bureaucracy hinder young people from entering the workforce. There is also a notable mismatch between educational outcomes and labor market needs, further complicating employment prospects. Additionally, Europe struggles with a deficit in high-end entrepreneurship, essential for job creation and economic growth. Unlike the U.S. and China, countries like France, Spain, Italy, and Germany lack “super-entrepreneurs.” Adding one super-entrepreneur per million adults could reduce unemployment by 0.88% and 1.1% for the intermediate-educated middle class.
The social consequences are equally troubling. Unemployed youth are more prone to social exclusion and mental health issues. Youth unemployment also fosters disillusionment with political and economic systems, risking social unrest and political radicalization. Additionally, the “brain drain” of talented youth emigrating worsens demographic challenges, and weakens countries’ competitiveness, leading to long-term economic stagnation.
Conclusion
Research shows that improving the business climate—through robust property rights, better access to finance, lower taxes, a business-friendly environment and reduced regulatory barriers—can foster job creation and private sector growth. Skills training and entrepreneurship promotion, aligned with private sector needs and combined with on-the-job training, enhance employment and earnings. Addressing the root causes of youth unemployment and implementing comprehensive solutions can unlock the potential of young populations in Europe and the Arab world, paving the way for a more prosperous and stable future. Collaboration among stakeholders and a commitment to market-friendly policies are key to tackling this complex issue.
Photo by Papaioannou Kostas
