Why Shabab? Youth, Demographics, and Economic Growth
"Shabab" is a popular word in Arabic which means youth. The Middle East Youth Initiative defines youth as those between the ages of 15 and 29. This range has been selected to reflect the prolonged transitions to adulthood faced by many youth in the region.
Today the Middle East contains the largest proportion of youth in the region's history. Rather than being perceived as a problem and source of social and economic pressure, this phenomenon can and should be recognized as a demographic gift. With the right policies and enabling environment, this demographic gift can be a source of economic prosperity as well as positive social change.
In recognition of this, the Middle East Youth Initiative focuses on how to expand economic and social opportunities for youth; we approach development for the sake of development to create hope and positive change. The economic, social, and political decisions made by policymakers today can have profound effects on the possibilities for young people to lead productive lives. Policies that promote their well-being can, in turn, set in place the foundation for future prosperity and stability.
The "demographic gift," also known as the demographic window of opportunity, connotes the presence of a large working-age population and low dependency ratio. The dependency ratio is the ratio of the economically dependent population to those who are productive. Dependents are those aged 0 to 14 and those over 65. Currently the Middle East is experiencing its largest demographic gift in its history. This can be attributed to the declining death rates and high fertility rates between 1950 and 2000. In 1985, a large share of the region's population was between 0 to 10 years old. By 2005, the youth population of Middle Eastern countries was large, and its share of the population is either peaking now or set to peak in the next five to ten years (except in Yemen and in the West Bank and Gaza).
The economies of the Middle East can therefore follow in the footsteps of the many Asian economies that took advantage of their fast-growing working populations and seized the opportunity presented by their "youth bulges." Timing is critical, as the demographic window of opportunity in the Middle East is expected to close by 2045. Until then, the region has the potential to take advantage of these conditions to increase incomes per capita, bolster savings and investment, and improve social welfare.
However, as is evident in the Middle East, an increase in the working-age population does not always translate into a dividend. In fact, the Middle East is not taking full advantage of its falling dependency ratio. In "Inclusion: Meeting the 100 Million Youth Challenge," we determine a country’s “true” dependency ratio by comparing the unemployed, working-age population to those who are working. For example, if a country's dependency ratio is low, but unemployment is high, the "true" dependency ratio takes into account the segment of population who are of working age but dependent because of lack of employment.
When a country has a lower dependency rate, it has greater prospects for higher growth and savings. However, in 2005, because of low participation and high unemployment, the Middle East's "true" dependency ratio was 2.19 compared with the actual dependency ratio of 0.59. If the region can match the 2000 labor market characteristics of East Asia from now until 2025, it can reduce its true dependency ratio to 0.96. Conversely, if current labor market outcomes persist, the region’s true dependency ratio will not fall below 2 by 2025, and the region’s demographic dividend will be largely squandered.
All of this underscores the importance of strong youth inclusion policies. If, over the next 20 years, youth participation rates were to rise from 39 to 67 percent (similar to that of youth labor force participation in East Asia in 2005), and youth unemployment were reduced by half, the true dependency rate of the region would drop below 1.5 by 2025. These results would occur even assuming there were no change in adult labor market outcomes. Through policies that increase the number of economically productive youth, the Middle East can capitalize on the area’s demographic dividend.
For many young people in the Middle East, the transition to adulthood is no longer as smooth and predictable as it once was. "Waithood" refers to the long and bewildering phase of time that a large proportion of Middle Eastern youth spend waiting for a full state of adulthood. Waithood conveys the multifaceted reality of the transition experience. Successful transitions require young people to gain the right skills while in school, engage in a purposeful search for a job or career, avoid risky behavior and, in good time, start an independent family. Because outcomes in one sphere spill over into another, failure in one or more of these transitions may cause multiple failures and result in youth exclusion.
Young men and women experience waithood in very different ways. For men, this period entails facing the pressures of finding a steady job, covering the costs of marriage and family formation, and securing credit to purchase a home. Women have fewer options for resolving their waithood experience. On the one hand, the period of waithood could be considered to benefit women through increased levels of education and the higher age of marriage. Women have caught up in school enrollment and attainment, and in several countries they have overtaken men in higher education (Dhillon and Yousef 2007). On the other hand, these educational gains have not resulted in decent employment opportunities. Further, economic security and social norms make marriage the centerpiece of the transition to adulthood for many young women, a milestone which is conditional upon the resolution of the challenges faced by their male counterparts.
The Middle East Youth Initiative has pioneered the concept of "waithood" in its research on young people in the Middle East. To read more, please refer to Stalled Youth Transitions in the Middle East: A Framework for Policy Reform by Djavad Salehi-Isfahani and Navtej Dhillon.