Juan Manuel Moreno (World Bank)

Skills Gaps and Meritocracy Deficit:

Challenges to the Transition from

Education to Work in MENA

Kuwait, November 5, 2014

MENA has a large share of untapped human resources

that are not participating in economic activity

2

19%

27%

6%

48%

Non-GCC Middle East and North Africa

27%

37%

5%

31%

Latin America and the Caribbean

Formal workers Informal workers

Unemployed Inactive

40%

16% 6%

38%

Europe and Central Asia

Global and regional youth unemployment rate

3

Regional youth unemployment

MENA is by far the region with the highest youth unemployment

0

5

10

15

20

25

30

35

40

45

WO

RLD

De

ve

lop

ed E

cono

mie

s a

nd

Euro

pe

an U

nio

n

Ce

ntr

al and

South

-Easte

rnE

uro

pe

(non

-EU

) an

d C

IS

East A

sia

South

-East A

sia

and

the

Pa

cific

South

Asia

La

tin

Am

erica a

nd

the

Cari

bbe

an

Mid

dle

Ea

st

No

rth

Afr

ica

Sub-S

aha

ran A

fric

a

12.4

18.1

17.9

9.5

13.1

9.3

12.9

28.3

23.7

11.8

12.2

19.2

17.4

11.2

12.5

9.0

10.9

24.5

18.3

11.1

12.7

16.8

18.6

7.6

13.9

10.0

15.9

42.6

37.0

12.5

%

Total Male Female

Source: ILO Global Employment Trends for Youth 2013.

The key questions that need to be asked on employability and school to work transition

• Do education and skills development

systems really enable people to access

jobs or are they rather barriers to

employability?

• Is being employable enough to get a job in

MENA countries?

• How can education and skills

development systems be adapted to

respond to and promote labor demand ?

1.

Do education and skills development

systems really enable people to

access jobs or are they rather barriers

to employability?

Great Progress, Greater Expectations and even Greater Aspirations…

Source: Edstats Note: Gross Enrolment is Total enrolment in a specific level as a percentage of the official school-age population corresponding to the same level of education in give school-year.

10 12

25 26 29 30 32 32 3338

50 51

0

10

20

30

40

50

60

70

80

90

100Average(1991-1995)

Average(2006-2010)

26

51 52

6771

7882

86 89 90 91 91 91 91 94 97

0

10

20

30

40

50

60

70

80

90

100Average (1991-1995)

Average (2005-2009)

Gross Enrollment in Secondary Gross Enrollment in Tertiary

… But the quality of education is still below international standards;

Source: Edstats Note: TIMSS = Trends in International Mathematics and Science Studies

Algeria

BahrainEgypt

Iran

Jordan

Kuwait

Lebanon

Morocco Oman

Qatar

Saudi Arabia

Syria

Tunisia

30

040

050

060

0

TIM

SS

Ma

th S

co

re (

200

7)

0 20000 40000 60000 80000GDP per capita (2007)

World MENA

Fitted values

Finland

Lebanon

Syria

Morocco

Oman

Singapore

R² = 0.0459

300

350

400

450

500

550

600

650

1 2 3 4 5 6 7 8 9

20

11

TIM

SS g

r 8

Sci

ence

Public Expenditure on Education as a % of GDP (WB 2010 Figures)

Public Exp on Education as % of GDP x 2011 TIMSS gr 8 Science

With comparatively high inefficiency;

And generating low quality skills

9

Benchmarking MENA countries in Math, TIMSS 2011

14 21

5 7

12 8

5 6

6 8

7 6

4 3 4

2

29 32

18 18

28 29

20 18

20 19

18 18

15 14 12

10

29 24

29 27

31 35

36 29 29 25

27 27

27 26

23 24

25 12

46 47

27 27

39 45 45 46 47 48

53 57

61 64

0% 20% 40% 60% 80% 100%

International medianOECD average

MENA non-GCC averageMENA GCC average

United Arab EmiratesLebanon

TunisiaIran, Islamic Republic

JordanQatar

BahrainWest Bank and Gaza

Saudi ArabiaSyria, Arab Rep.

OmanMorocco

Advanced (>625) High (550-624) Intermediate (475-549) Low (400-474) Below low (<400)

Relevance to the Labor Market does not seem to be working well either…

Technical/vocational enrolment in secondary (ISCED 2 and 3)

as % of total secondary enrolment (ISCED 2 and 3)

Egypt 1998-2006

Source: Edstats

0

5

10

15

20

25

30

35

2000

2009

11

1416

13

16

6

3

15

5

1921

11

0

5

10

15

20

25

Professionals Technic.& assoc. prof.

Clerks Serv.& shop/market

sal. wrkrs

Craft & related trad. wrkrs

Plant & machine

operat. &

assemb.

Occupational Distribution Workforce 25-34 [Secondary Vocational]

1998 2006

Source: Egypt ELMPS

… and the employers are complaining that graduates are not employable

7

7

14

25

33

34

43

43

54

0 10 20 30 40 50 60

Germany (2005)

Korea (2005)

Spain (2005)

South Asia

Africa

East Asia & Pacific

Latin America & Carbbean

Eastern Europe and Central Asia

Middle East and North Africa

(% of human resource manager agreeing that recent university graduate hires have the appropriate skills)

0

10

20

30

40

50

Egypt Jordan Morocco Saudi Arabia Yemen

Universitygraduates Hardskills

Universitygraduates Soft skills

Relevance: perceived skill shortages (% of firms perceive skills of workforce as constraint)

Do existing education & training systems enable people access jobs or are they rather barriers to employability?

(or Why are there skills gaps?)

Lack of institutional

dialogue

Knowledge and

information failures

Young people have limited information to base their educational choice Employers have limited information on which to base hiring decisions Education & training systems have limited information to base reform, curriculum changes, etc.

Signal for public hiring rather than

skill provision

Early selection,

rigid tracking and high-

stakes examinations

Focus on irrelevant skills and content

A logic of selection prevails over a logic of

learning

The public sector is the main ‘client’ and shapes

expectations

Private sector and education

& training operate in isolation

Gov dual function: jobs & regulation

Gap between what employers and other stakeholders expect from the education system (skills) and the wider social perception regarding what really counts (scores)

Is being employable enough to

get a job in MENA countries?

2.

In MENA, being employable is not enough for youth - and outsiders in general - to transition from education to work and to get a job. As a result, youth need to succeed in a “double transition”: in addition to obtaining competencies and credentials to be employable, they need to position themselves in the labor market

THE DOUBLE TRANSITION: FROM EMPLOYABILITY TO EMPLOYMENT (I)

What matters for graduates’ second transition is: whether or not employability (skills and competencies) counts when employers make hiring decisions; whether or not education (credentials and qualifications) matters to employers when they decide among candidates for a job; and whether or not hiring is transparent and based on merit.

THE DOUBLE TRANSITION: FROM EMPLOYABILITY TO EMPLOYMENT (II)

The ‘second transition’: ‘whom’ you know matters

Perception of jobs given through connections

(Gallup opinion poll among youth, major constraint to getting a job)

0% 20% 40% 60% 80% 100%

Bahrain

Iraq

Yemen

Algeria

Syria

Lebanon

Jordan

West Bank and Gaza

UAE

Djibouti

Saudi Arabia

Kuwait

Egypt

Tunisia

Qatar

Morocco

Libya

33

30

29

25

24

22

18

15

15

15

14

14

12

10

9

9

8

26

20

29

22

46

42

39

41

34

15

20

24

59

63

17

12

17

7

5

4

6

4

1

4

3

8

23

8

16

1

3

16

28

5

Jobs given only to connected people No good jobs available Lack training Other

“Ma’am, even if we acquire the right skills, even if new jobs are created, what does it matter if I do not carry the “right” family name? My less talented class mate with the connections will end up landing the job anyway.” (Young woman, Morocco) “They advertise for jobs, but that is just a routine process, they already know who will be hired. Young people hope they will get hired but it never happens.” (Young woman, Egypt)

Jobs found through informal mechanisms

(Proportion of employed in the private sector

who found their job through friends/relatives )

80

66

53

40

33

0

10

20

30

40

50

60

70

80

90

Lebanon Syria Iraq Yemen Turkey

A meritocracy deficit?

5.3 4.9

4.5

4.2 4.1 4.0

3.8

3.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

OECD MENAGCC

EAP LAC AFR SA ECA MENA nonGCC

MENA scores low on proxy of meritocratic hiring (Reliance on professional management in making hiring decisions versus their reliance on families and friends, Global Executive Survey)

Algeria

Egypt

Jordan

Lebanon

Morocco

Syria

Yemen

02

04

06

08

0

skill

mis

ma

tch

2 3 4 5 6relianceonprofessionalmanagement

MENA Non-MENA

Fitted values all countries

Perceived skill shortages larger in countries with less

meritocratic hiring Employer-reported skill shortages versus reliance on professional

management when making hiring decisions)

Source: Global Executive Survey, 2011

The hypothesis of a Meritocracy Deficit

• The increasing demand for transparency and equality of opportunity in accessing jobs makes the importance of meritocracy and clear rules in job search and hiring even more salient.

• Young people and their families have high expectations, invest heavily in education and skills, and they expect these investments to pay off . Yet listening to students, graduates, and employers in MENA countries, there is a widespread perception that education credentials serve a minor role in employers’ hiring decisions.

• Educated youth in MENA have received a clear message from the labor market: to access one of the few insider jobs, you must wait your turn or already belong to an insider family.

How can education and skills

development systems be adapted

to respond to and promote labor

demand ?

3.

Barriers Conditions for change Policy answers

Private sector and education & training systems operate in

isolation

The public sector is the main ‘client’ of

the education system

A logic of selection

prevails over a logic of learning

Close the information and knowledge gaps

Replace the logic of

selection with a logic of learning

Make employability

count through renewed partnership

with the private sector

Provide 2nd chance options outside the

education system

Monitoring & evaluation; dissemination of data; reform of assessment & certification. Provide opportunities for every student; reform school-leaving examination system; focus on soft-skills; paradigm shift for TVET

Institutionalize coordination/communication channels; private provision of TVET; efficient and transparent intermediation

Meritocracy deficit

Low quality and relevance of skills

Little importance of merit in access

to jobs

Comprehensive ALMP package; entrepreneurship training; wage subsidies; temporary workfare/public works; home-based work