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Unemployment
The unemployment problem has become increasingly serious for Middle East and North Africa (MENA) countries in recent years. This is especially true in Egypt, where the unemployment rate has increased by 3% between 1988 and 1998 and continues to rise (as cited in El-Hamidi and Wahba 2005, 2). However, other MENA countries are also experiencing changes in the labor market, although the structure varies for each of them (Assaad and Krafft 2016).
Despite temporary declines in unemployment during certain periods for various economic, demographic and institutional reasons, the COVID-19 pandemic poses a threat to economic activity and labor conditions (Assaad 2007). MENA countries are characterized by special patterns of unemployment in relation to both age and education groups.
The reasons for a person’s lack of job can be both voluntary and involuntary. The MENA countries are characterized by unemployment among the educated population, as uneducated people cannot economically afford not to work due to the shortage of personal funds. From 1998 to 2006, the number of people reporting the inability to find any job decreased by almost 10%, which indicates the prevalence of voluntary causes of unemployment, such as choosing the best working conditions (Assaad 2007). Thus, the main reason for unemployment is the inadequacy of potential workers’ qualifications and the offers available on the labor market.
It is noteworthy that patterns of unemployment duration indicate “unemployment in the MENA region as primarily a labor market insertion phenomenon” (Assaad and Krafft 2016, 18). Thus, people who quit their job or have lost it find a new one faster than those who have no working experience.
The level of education in Egypt contrasts with Tunisia and Jordan, which also affects the structure of unemployment in these countries. In Egypt, a person with less than secondary education has no chance of getting a formal job, while in Tunisia and Jordan, there are such opportunities (Assaad and Krafft 2016). Thus, in Egypt, there is a limited number of reasons for the least educated population to remain jobless. Thus, unemployment in MENA countries affects predominantly educated young people, 24% of whom in 2004 could not find a job (El-Hamidi and Wahba 2005, 3). Therefore, the described patterns with a decrease in economic activity due to the pandemic point to young educated people entering the labor market as the most vulnerable group in terms of unemployment.
A distinctive feature of the MENA labor market is the segmentation of the private and public sectors, which influences the patterns of unemployment. Adjustment policies force young people to queue for a job in the government service, which increases the duration of unemployment. As a consequence, overstaffing occurs in the public sector, which limits mobility (Said 1996). The main concern of MENA countries with regard to unemployment is education policy specifically for the government service, expansion of the public sector, and wage programs, which constraints opportunities in tradable industries for young people (Said 1996).
Overstaffing and wages decrease in the public sector, as well as reduced demand for educated and skilled workers in the private sector, negatively affect the number of the unemployed. Thus, the policy aimed at improving labor market conditions should be based on promoting the private sector and reducing the influence of the state on the economies of countries.
The most effective would-be initiatives to develop private businesses and control minimum wages. Promotion of sectors capable of generating employment such as agriculture, banks, textiles, housing is also crucial, as they are labor-intensive. It is also necessary to focus on reducing the birth rate through education policies and social benefits (El-Hamidi and Wahba 2005). The problem of unemployment in MENA countries is mostly common for women, whose employment opportunities are limited by the public sector, regardless of educational level (Said 1996).
Married and unmarried women are restricted in mobility in Arabic countries, which practically does not allow them to work in the private sector (Assaad and Krafft 2016). Thus, the policies introduced must be gender-specific to give women more freedom in choosing job opportunities. Both men and women who are unmarried are restricted in their movement by their families (Assaad and Krafft 2016). Thus, it is necessary to provide incentives and promote ideas of gender equality for the expansion of opportunities in the private sector.
Wage Structure and Inequality
Occupational segregation is an urgent problem for MENA countries, generating wage inequality in relation to gender. Job discrimination is traditional in a region where society defines professions which are suitable and respected for women. Despite the higher general level of education, women receive lower wages compared to men (El-Hamidi and Said 2008). Moreover, they are limited in their search for work in the private sector, and they are forced to enter the civil service or refuse labor altogether. Countries of the region experienced a reduction of “0.4 percentage points between 1991 and 2018 in the gender employment gap” (Cattaneo and Pozzan 2019, 24). Women in MENA countries experience wage inequality in the private sector, which forces them to work in public service.
Inequality can be expressed not only in the difference in wages depending on the gender. For example, in Jordan, it is reported that in the public sector, women have a payment advantage; however, they are subject to labor segregation and have limited access to benefits (Said 2012). However, in Egypt, the wage gap between men and women is about 50% in both the private and public sectors (Said 2012, 98). Women experience difficulties finding jobs in the private sector, as they are subject to many social prejudices and are less protected than in the public service. Thus, the private sector is highly gender-segregated, which creates a downward wage pressure for women.
The gender-related wage gap for the public and private sector decreased significantly between 1988 and 1998. In the early 1990s, the difference was 6% and 79% for the public and private sectors, respectively (El-Hamidi and Said 2008, 8). Whereas later, the gap has narrowed to 12% and 39%, respectively (El-Hamidi and Said 2008, 8). However, in the period from 1998 to 2006, negative dynamics were observed again with a substantial decrease of inequality from 2006 to 2012 (Said 2012). Moreover, the impact of returns of education on gender-related wage inequality is noted. Women, despite having an education, are forced to work in low-paid jobs (Said 2012). Thus, the main lines are education, gender, and segregation in the private and public sectors.
The reasons for gender segregation can be both supply and demand in the labor market. Neoclassical theories argue that women legitimately receive lower wages because they show less productivity (Anker 1998, 15). It is common in MENA countries to believe that marriage and childbirth force women to be absent from work and less productive (El-Hamidi and Said 2008). As noted, women generally have a higher level of education, which implies their distribution in all sectors as skilled workers (Anker 1998). However, the trend is opposite as in MENA countries; there are “just nine job types constituting 95 percent of female nongovernmental paid work ” (El-Hamidi and Said 2008, 8).
This distribution pattern highlights the discrimination and occupational segregation, which affects female wages. According to the neoclassical theories, women are also exclusively responsible for caring for the family, which also limits their ability to work (Anker 1998). Thus, the main reasons for inequality in wages are gender discrimination and prejudices regarding the functions of women in society. This perspective correlates with neoclassical theories, which emphasize the prevalence of traditional views on gender roles.
Economic crisis situations are characterized by a worsening of the described situation, which is potentially true for the post-pandemic period. First of all, workers with higher education receive more benefits when working in the private sector (Said 2012). An effective policy to overcome the existing problem, as in the case of unemployment, should include the promotion of the private sector. In particular, women entrepreneurship should be encouraged, which is extremely underdeveloped in MENA countries (Hill 2020).
It is also necessary to provide open information about the income of all social and gender groups and promote initiatives to support women. From an educational point of view, access to a wider variety of higher education programs should be improved, not just training for the public service (Said 2012). Moreover, many parents restrict their daughters from obtaining higher education, which also deprives them of opportunities (Assaad 2010). However, without family support, young women cannot pay for education. Thus, it is also necessary to provide access to education for the less economically advantaged people and expand government budget programs.
Reference List
Anker, Richard. 1998. Gender and jobs: Sex segregation of occupations in the world. Geneva: International Labour Organization.
Assaad, Ragui. 2010. “Equality for all: Egypt’s free higher education policy breeds inequality of opportunity.” Paper presented at the Economic Research Forum (ERF).
Assaad, Ragui, and Caroline Krafft. 2016. “Labor market dynamics and youth unemployment in the Middle East and North Africa: Evidence from Egypt, Jordan, and Tunisia.” Paper presented at the Economic Research Forum (ERF).
Assaad, Ragui. 2008. “Unemployment and youth insertion in the labor market in Egypt.” In The Egyptian Economy: Current Challenges and Future Prospects, edited by Hanāʼ Khayr al-Dīn, 133-178. Cairo: American University in Cairo Press.
Cattaneo, Umberto, and Emanuela Pozzan. 2019. A quantum leap for gender equality: For a better future of work for all. Geneva: International Labour Office.
El-Hamidi, Fatma, and Mona Said. 2007. “Have economic reforms paid off? Gender occupational inequality in the new millennium in Egypt.” Paper presented at the Economic Research Forum (ERF).
El-Hamidi, Fatma, and Jackeline Wahba. 2005. “The effects of structural adjustment on youth unemployment in Egypt.” Paper presented at the 12th Annual Conference of the Economic Research Forum (ERF).
Said, Mona. 1996. “Public sector employment and labor markets in Arab countries: Recent developments and policy implications.” Paper presented at the Economic Research Forum (ERF).
Said, Mona. 2015. “Wages and inequality in the Egyptian labor market in an era of financial crisis and revolution.” Paper presented at the Economic Research Forum (ERF).
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