Wednesday, August 14, 2013

Egypt - Inequality of Opportunity

Egypt has experienced the longest period of unrest during the Arab Spring of any nation, save perhaps Syria.  Looking back to January 25th, 2011, the "Day of Anger" was set as a day of protest against abuses by the nation's police force.  The demonstrations and anger spread across the nation until the "March of the Millions" on February 1, 2011 when it is reported that up to 2 million people assembled in central Cairo.  The resulting pushback saw more than 300 people killed in the resulting violence.  Finally, on February 11, 2011, President Mubarak stepped down.  Since that time, with brief respite, anger in the streets of Cairo in particular remains.  Why?

One of the root causes of dissent in Egypt is related to the nation's economy.  Let's look at some background information first.  As shown on this chart, Egypt has had a very high birth rate up until the last 10 years:

With the replacement rate being 2.1 children per woman, the number of young adults in Egypt as a proportion of the population is staggering, resulting in a population pyramid that has a conspicuously large base as shown here:

In 2008, only 60.3 percent of married Egyptian women used any form of contraception and of these, 2.7 percent used traditional methods.  By way of comparison, the fertility rate in the United States in 2011 was 1.89 children per woman and hit the replacement rate of 2.1 way back in 1971.

The massive number of young Egyptians results in one major problem; a lack of economic opportunity.

Here are Egypt's most recent unemployment statistics for the first quarter of 2013:

Total Unemployment Rate: 13.2 percent
Labour Force Participation Rate: 48.2 percent
Number of Unemployed: 3.6 million (up by 1.2 million from Q1 2010)
Unemployment Rate for 20 to 24 year olds: 42.3 percent
Unemployment Rate for 25 to 29 year olds: 24.3 percent

Of the total unemployed Egyptians, 70.7 percent are educated with 30.1 percent having university degrees.  

A World Bank study looked at Egypt's inequality of opportunity.  Despite the fact that Egypt has only moderate income inequality as measured by its Gini Coefficient (30.8 percent in 2008 compared to 0.49 in the United States), the opportunities available to Egyptians vary greatly and are impacted by circumstances that are well beyond their control as shown on this graph:

Keeping in mind that the higher the number, the more inequality in opportunity, you can quickly see that there is a great deal of inequality in the ability of young Egyptian men and women between the ages of 15 and 29 years to transition into the work force. 

The work force opportunities for the least and most advantaged Egyptian youth also vary greatly as shown on these two graphs:

Disadvantaged Egyptian youth are more likely to leave school earlier; by the age of 20, less than 10 percent remain in school.  In contrast, of the more advantaged Egyptian youth, 50 percent are still in school by the age of 20.  Again, when it comes to transitioning between schooling and working, 50 percent of disadvantaged Egyptians find themselves unemployed for an average of 12 years  after schooling whereas the period of joblessness for their more advantaged peers is only 8 years.

The study also shows that over 80 percent of the inequality in opportunity for young Egyptian males can be attributed to family background; parental education level and occupation play a huge role in determining the job opportunities open to their sons.  In the case of young Egyptian females, family background is even more of a determinant in the workforce opportunities available.

With a huge cohort of young Egyptians between the ages of 15 and 24, estimated to be over 21 percent of the population in 2005, the situation is unlikely to improve over the coming decade.  Egypt's economy has been stagnant since the end of the Great Recession when measured in real per capita terms and the recent uprising has done nothing to improve the situation.  In any case, for the foreseeable future, any new Egyptian government is likely to find that their ability to rule is constrained by a very unhappy young, unemployed demographic.

1 comment:

  1. You nailed it. The Egyptian families need to know that is okay not to go to college and to work at a "hands on"job. I agree that education is very important but the fact is that there no jobs avaiable for these young people, so be a plumber, some one who fixes cars or a butcher. I know that no mother or father wants to let their daughter marry someone that is not college educated. Our college classes run low in numbers compared to the 600-1000 students per class in Egypt. Stop with the education, there are no jobs for you.

    How many jobs for teachers (who get paid almost nothing) engineers, lawyer, doctors and pharamcts are out there. You are lucky if you know someone.