Idea Factory on inclusive policies for young men and women in MENA Youth in the MENA region: How can the private sector create more and better jobs?

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1 Idea Factory on inclusive policies for young men and women in MENA Youth in the MENA region: How can the private sector create more and better jobs? Fares Al-Hussami MENA-OECD Investment Programme, Global Relations Secretariat, OECD Paris, 4 February 2015

2 Why is youth unemployment in MENA higher than elsewhere in the world? Youth unemployment rates in MENA and other regions, 2013 (or latest available data) 60 Percent of total labour force (age between 15-24) Source: ILOSTAT database (for countries), ILO Key Indicators of the Labour Market database (for regional aggregates) and OECD statistics. 2

3 Youth unemployment in MENA: Key characteristics KEY CHARACTERISTICS Youth unemployment rate is 3.7 times higher than for adults Young women unemployment rate is twice higher than young men More than one third of the unemployed are tertiary educated Very lengthy school-to-work transition Job informality is very high among the youth 3

4 This report identifies four areas of work for the private sector to create more and better jobs CHALLENGES POLICY OPTIONS 1. Slow structural transformation 2. Challenging and discretionary business environment 3. Mismatches between the supply and demand for skills 4. Slow integration of young women in the labour market Boosting overall structural and high-value adding industries Stimulate private sector-led job creation by supporting enterprise creation and young firms development Strengthen the role of the private sector in adequate skills development for the youth Reduce the gender gap and facilitate young women entry into the labour market Identification of good practice cases from the MENA region and the world and the reasons behind these successes 4

5 Challenge: The business and regulatory environment Doing Business ranking for MENA economies, 2010 and 2014 (A lower value indicates a better business regulation environment) Source: World Bank Doing Business Indicators

6 Policy options : Stimulate private sector-led job creation by supporting enterprise creation and young firms development Establish a conducive business and regulatory environment for new and young firms Predictable, non-discretionary transparent regulatory environment Sound product market competition as it would facilitate new firms entry Develop youth entrepreneurship programmes Tailored entrepreneurship trainings: training, coaching, and mentoring Local entrepreneurship culture and teaching entrepreneurship Enhance access to financial services for new and young firms Promote competition in banking sector and develop private capital markets Promote business angel networks Support access to innovation for new and young firms Creation of science parks and technology centers Strenghen clusters and local innovation systems 6

7 Challenge: Mismatches between the supply and demand for skills School enrolment in tertiary education and youth unemployment rates in MENA, 2012 School enrollment, tertiary (% gross) Qatar Lebanon Saudi Arabia Jordan Bahrain Tunisia Algeria Egypt, Arab Rep. Syrian Arab Republic Morocco yemen Palestinian Authority Youth unemployment rate Source: ILO Key Indicators of the Labour Market, World Bank (World Development Indicators), and Barro-Lee (dataset on educational attainment) 7

8 Challenge: Mismatches between the supply and demand for skills 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Unemployment according to education level, MENA economies and OECD, latest data available (% of total unemployment) Unemployment with primary education Unemployment with secondary education Unemployment with tertiary education Source: World Bank, World Development Indicators (based ILO Key Indicators of the Labour Market Database) 8

9 Policy options: Strenghen the role of the private sector in adequate skills development for the youth Strengthen partnerships between business, government and academia Develop and implement effective education and skills national strategies Public-private and academia joint initiatives for targeted skills trainings Improve vocational education and training (VET), on-the-job training and the provision of quality apprenticeship Improve the provision of soft skills: ICT literacty, foreing languages, analysis and critical thinking (actual learning opposed to educational attainment only) Enhance the provision of job search services and career guidance by private actors Better targeted and more cost-effective active labour market policies Reduce the job information mismatch Public employment services in collaboration with private contractors 9

10 Challenge: Slow integration of young women in the labour market Labour force participation in MENA compared to the OECD and other regions, (% active population) All Women Young women OECD South East Asia and the Pacific Sub Saharan Africa Latin america and the Caribbean Middle East and North Africa Source: ILO, Global Employment Trends, 2015

11 Policy options : Reducing the gender gap and facilitate young women entry into the labour market Reduce the gender gap in the private sector Incentives for young women to join and remain in the labour market Public awareness and anti-discrimination laws, promoting pay transparency Foster women employability: targeted trainings and job search assistance Promote young women entrepreneurship Create awarness around Business development Services (BDS) Provision of BDS more accesible to young women Supporting women entrepreneurship networks to share experience Improve the work-family balance in the private sector Raise the duration of child-related leave entitlements Facilitate part-time working options 11

12 THANK YOU Fares Al-Hussami MENA-OECD Investment Programme Global Relations Secretariat OECD 12

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