Universities worsen high youth unemployment – Report

Egypt’s universities have failed to provide graduates with high-level, job market-related skills to fill more than 600,000 vacancies in the private sector, contributing to high levels of educated youth unemployment – and in some cases ‘wilful’ joblessness – according to the African Development Bank.

In a position paper titled Addressing Informality in Egypt, which examines informal sector employment in Egypt, the African Development Bank or AfDB says most universities and other tertiary institutions in the country do not provide graduates with effective career guidance nor the skills required for private sector jobs.

“Many graduates continue to display a strong appetite for public sector jobs rather than work in the private sector or self-employment,” says the report.

Wilfully unemployed

Many graduates continue to queue for public sector positions, remaining wilfully unemployed until a government post becomes available, creating a situation that the AfDB says has raised educated youth unemployment levels and produced a vicious circle.

More bad news is that formal jobs in the public service in Egypt, as elsewhere in the Middle East and North Africa, are disappearing quickly, according to Dr Shanta Devarajan, chief economist for the World Bank’s Middle East and North Africa division.

According to Devarajan, Egypt has created a dysfunctional tertiary education system that is creating graduate unemployment instead of alleviating the problem.

“Employers in the country are relentlessly complaining that university graduates lack the skills needed to work in the global marketplace, but very little is being done to rectify the situation,” said Devarajan, who has been studying the employment crisis in North Africa for many years.

Job market mismatch

In a briefing titled “The paradox of higher education in MENA”, published by the Brookings Institution, Devarajan argues that in addition to universities in Egypt and other countries in the region having some of the lowest quality educational outcomes globally, most students are not trained in science, mathematics, engineering and other technical subjects required for the job market.

“Furthermore, many graduates lack soft skills, including creativity and teamwork, partly because their training has emphasised memorisation and rote learning,” said Devarajan.

Having a degree, therefore, is no guarantee of employment. According to Dr Gita Subrahmanyam, research associate at the London School of Economics and Political Science and the expert who prepared the African Development Bank report, 70% of Egypt’s unemployed are between 18 and 29 years of age – and 60% of them have a university degree.

“Skills-related barriers limit the contribution that young people in Egypt can make and lead to their economic and social marginalisation,” said Subrahmanyam.

Social networks

In this regard, better jobs are hard to come by, especially among graduates from poor households who have no strong social networks in a country where employers in the formal sector often base hiring decisions on personal references rather than skills assessments.

Amid efforts to find solutions to graduate unemployment, the AfDB has blamed the Egyptian government for failure to stop escalating informality in the employment sector and improve academic standards in higher education.

According to Subrahmanyam, informality in the private sector has become a forced choice for graduates from poorer households and other vulnerable groups that have been excluded from the formal sector due to lack of opportunities and resources, or discrimination.

In subsequent studies on unemployment, Subrahmanyam has urged the Egyptian government to help formalise informal enterprises by offering tax breaks to new businesses, and tax amnesties for existing firms that are keen to improve their services by employing educated labour.

Government jobs expectation

Although the high degree of graduate unemployment in Egypt is linked to an adverse investment climate and limited growth of the private sector, the perception that university graduates could eventually get employment in the public sector has also had an impact on the quality of education available.

According to Devarajan, the issue of quality or specialisation matters little to universities that believe their graduates will get jobs in government.

“Subsequently, most students seek easier options by choosing to study social sciences and humanities, instead of science, engineering, technology and mathematics,” he said. Important soft skills are also not expected by the public sector.

As a whole, therefore, the system has not only contributed to low academic achievement in tertiary education but has failed to provide social mobility opportunities to poor and other vulnerable groups – despite low fees and, in some cases, free education.

“The pattern of low fees or free university education has not benefited the poor much, as the overwhelming majority of students in universities in Egypt come from the richest parts of the population,” said Devarajan.

Rich parents can afford to send their children to quality secondary schools to prepare them to pass university admission examinations. As a result, universities in Egypt, Sub-Saharan Africa, the Middle East and North Africa and parts of Asia are full of students from the richest strata of society, he said.

The downside of free education

Referring to the World Bank’s initiative to reform Nepal's Institute of Engineering at Tribhuvan University, partly through the introduction of cost-sharing, Devarajan said free education provided weak incentives to improve the quality of university education, since students were not motivated to demand higher standards as a means to ultimately recoup their investment.

“The experience of Tribhuvan University showed that when it started charging tuition fees in the Institute of Engineering, the quality improved so much it started attracting students from all over South Asia,” he said.

While charging exorbitant tuition fees for university education is not likely to solve all the problems around quality education in Egyptian universities, and students from poor homes and other vulnerable groups should be able to afford tertiary education, the option of means-tested scholarships and bursaries rather than across-the-board subsidies could be considered.

But even as universities are encouraged and motivated to improve the quality of graduates, the bank suggests there is an urgent need for Egypt to engage in reforms that bridge the fundamental disconnect between skills learned in school and those required by the private sector, boosting both employment and productivity.

As Devarajan has pointed out, such reforms could see history repeat itself, with Egypt once again becoming a global centre of learning and academic excellence.