67731 January 2012 – Number 55 FROM EDUCATION-TO-WORK: OPPORTUNITIES AND CHALLENGES IN THE WEST BANK AND GAZA Stefanie Brodmann, Ernesto P. Cuadra, Mohamad Ismail basic school degree. Compared to other countries in Allouche, and Samira Ahmed Hillis1 the Middle East and North Africa (MENA) Region for which data are available, WBG has the highest Introduction: Young Palestinians face serious adult literacy rates and the highest gender parity employment challenges upon graduation. In 2009, (0.94) in adult literacy. The composition of unemployment among youth 15-24 years old was university subjects amongst tertiary education 28% for men and 36% for women in West Bank and graduates is heavily skewed towards education, 57% for men and 68% for women in Gaza. To better social sciences, business, and law. Less than 15% of understand the reasons behind these poor labor graduates study sciences or engineering.3 market indicators, the Ministry of Education and Higher Education (MOEHE) in collaboration with Unemployment: Unemployment rates vary not only the World Bank conducted focus group discussions by region and gender but also by level of education with concerned stakeholders in March 2011. This and time since graduation. Unemployment rates Quick Note provides a summary of the presentation among graduates from both university and on the patterns of education-to-work transitions of secondary education institutions are above 60% at youth in the West Bank and Gaza (WBG) made by the age of graduation (23 for those with university the World Bank team to the focus group meetings. It and 18 for secondary education diplomas). In also incorporates a summary of the subsequent contrast, unemployment at graduation (age 16) is discussions. about 44% for those who have only obtained a basic education. The long term employment prospects, Education-to-Work Youth Transition Patterns2 however, differ significantly by education level: The The Impact of Educational Levels: Current cohorts more educated have better long term employment of Palestinians have done well in educational prospects than those with lower levels. At age 40, attainment compared to earlier generations. Only unemployment rates are much lower for university 5% of Palestinians aged 24-32 have not obtained a graduates (less than 5%) than among secondary formal degree. Among the literate, 20% have gained school graduates (15%) or among those with only a a university degree, another 25% have completed basic school degree (22%). secondary education, and 50% have obtained only a These data represent a snapshot of the current situation and do not imply that youth aged 16 today will follow the same trend as those aged 40 today. 1 Stefanie Brodmann (Economist), Ernesto P. Cuadra (Lead Factors such as diminishing job opportunities and Education Specialist), Mohamad Ismail Allouche (Junior Professional Associate), and Samira Ahmed Hillis (Senior an increase in the number of tertiary educated youth Operations Officer) work in the Middle East and North Africa are likely to alter the employment pattern of today’s Human Development Department of the World Bank. This Quick youth. Note was cleared by Gustavo Demarco, acting Sector Manager. 2 The following analyses draw upon data from the Palestinian Education-to-Work Transition: The transition from Labor Force Survey (LFS) from the year 2009. The data were a state of dependency and education to collected by the Palestinian Central Bureau of Statistics and independence and employment is crucial and earlier rounds of the data are available online (http://www.pcbs.gov.ps/). The LFS is representative of households in WBG and contains information on major aspects of the labor market (education, employment, etc.). 3 UNESCO Statistics and World Bank Development Data. conditions a number of later outcomes, such as Figure 2: Labor force status in Gaza by gender, 2009 family formation. Figures 1 and 2 show the distribution of Palestinian youth aged 15 to 33 in education, employment, and joblessness (i.e., actively searching or not searching for a job). Figure 1 illustrates that over 85% of 15-year-old male youth living in the West Bank are participating in education. This rate is reduced to 50% at age 18 when youth graduate from secondary education and down to 19% at age 23 (the age of university graduation). Conversely, male employment rates increases steadily after. Around 18 years, the proportion of jobless male youth takes off and reaches 33% among 23-year-olds (20% unemployed and 13% inactive). While there is no apparent gender difference in the transition out of education, the transition patterns into employment differ starkly. Female employment rates never surpass 20% and joblessness stabilizes around 80% in the late 20s. Figure 1: Labor force status in West Bank by gender, 2009 Duration of Education-to-Work Transition: The duration of the transition is indicative of the challenges youth are facing. A commonly used indicator compares the age at which 50% of the population has left education and the age at which 50% has found employment (OECD). The difference in ages provides the average time it takes to transition from education to work. In the case of WBG, however, this indicator is less useful given that in some sub-groups, employment never reaches 50% and a significant segment of its citizens are out of the labor force.4 Taking the proportion actually entering employment as an upper bound, the transition rates are 3 years for male youth in West Bank (median graduation age 18 and median age entering employment 21) and 4 years in Gaza (graduation at median age 20 and employment at median age 24). For females, the respective figures are 2 years in West Bank (median ages 21 and 23) and 1 year in Gaza (median ages 22 and 23). In Gaza, the employment situation is even more Destinations for the Successful Job-Seekers: Those severe and unemployment more pronounced youth who eventually find employment do so in (Figure 2). Unemployment rates increase as youth different sectors depending on their level of exit education. Unemployment peaks at 35% among 26-year-old men and at 22% among 23-year-old 4 women. O’Higgins, 2011. “Youth Labor Markets in Palestine. Unpublished Manuscript.� January 2012 · Number 55 · 2 education and gender. Among the university Among many reasons, participants perceived the graduates hired in the 6 months prior to the following factors as most important in explaining collection of the LFS, the vast majority joined the slow education-to-work transition rates in WBG: public sector. 70% of recent jobs for university (1) Political and Economic Situation: WBG face educated women were provided by the public sector severe political and economic challenges. The (mainly in education). Conversely, the majority of security situation has deteriorated after the second newly hired, low-skilled Palestinians joined the intifada and economic outcomes have subsequently manufacturing sector (27% among women and 14% worsened. 4.4 million people live in West Bank among men), construction (16% among men), and (63%) and Gaza (37%) and economic growth is wholesale sector (16% among men). heavily donor-driven and unequally distributed. A note of caution: these statistics paint a static Focus group participants across WBG most often picture of an inherently dynamic situation. Also, referred to the political and economic situation in lower-skilled youth typically face higher job explaining graduates’ labor market outcomes: insecurity and employment volatility and lower  Fragmentation of cities with job opportunities hinder mobility quality employment, and are thus more vulnerable.  Occupation negatively affects creativity Despite gender parity in educational levels, the  Palestinian internal conflict and more economic support for majority of women exit the labor market. Obviously, West Bank than Gaza different groups, such as men/women, low/high  Lack of coordination between local and int. organizations educated, or recent graduates/longer-term  Huge gap between expectations and reality unemployed, face group-specific sets of challenges  Limited access to regional labor markets as well as constraints that are similar across groups. (2) Lack of Labor Market Assessment and Coordination: Perceptions on Main Constraints to Employment Understanding which types of skills the labor by New Entrants: To understand stakeholders’ market needs is a critical component of a well- perceptions, focus group discussions were held with functioning system. Ideally, information sharing, 6 groups in the West Bank and 5 groups in Gaza coordination and trusted relationships are from March 17 to 23, 2011, representing a mix of developed between those who demand and those business owners and principals, students and who supply skills and feed the skill acquisition graduates of technical colleges and universities. The process. Participants stressed the absence of interviews were conducted jointly by the Ministry of information, coordination, and relationship: Education and Higher Education and the World Bank. The focus group participants were split into  Lack of labor market needs assessments to identify small groups of 3-5 participants and were asked to specialized subjects and community needs identify the “four constraints faced by young people  Lack of coordination and planning and labor market needs to get into a paid job upon graduation.� Figure 3  No coordination between MOEHE and other government bodies and the private sector groups the responses and their frequencies into 11  Lack of strategic planning reflected in poor curricula categories.  Lack of trust between public and private sectors Figure 3: Constraints to education-to-work transition  Long process of accreditation of new programs by MOEHE (3) Skill Mismatch: Results from enterprise surveys across the world (World Bank Investment Climate Assessments 2006-2010) indicate that a large proportion of firms identify worker skills and education among their top five constraints to business growth. While this seems to be less of a concern in WBG (data from 2006), focus group participants clearly identified the relevance of skill for the needs of the labor market and the level of competencies and experience of graduates as being among the most often named constraints to employment for youth: January 2012 · Number 55 · 3 Relevance of Education to Labor Market: women are confined to employment in professions  Program/skills not market needs oriented with limited absorptive capacity.5  Limited enrollment in technical specialization Policy Options Facilitating Education-to-Work  Limited attention to vocational education Transition: This final section provides an  Large number of graduates in same specializations abbreviated list of the policy advice focus group  Lack of life skills participants gave when asked to provide “two ideas  Lack of continuous education that you believe could help address the problem.�  Education has become commercialized/too many colleges While this note does not aim to provide any specific Competence and Experience: policy recommendations, the need for closer  Lack of job-relevant experience cooperation between the private sector and higher  Lack of technical experience education institutions to improve the relevance and  Lack of capacity/experience of industry to train students quality of skills development emerges as a key recommendation for facilitating graduates’ (4) Limited Capacity of Tertiary Education Institutions: transition from education to work. Tertiary Education Institutions, in particular the Labor Demand: Technical and Vocational Education (TVET) system,  Decrease regional disparities in opportunity face numerous challenges as programs remain  Promote public works opportunities predominantly supply-driven with low capacity to  Offer wage subsidies to employ graduates equip students with skills needed:  Cooperation with Arab markets to promote labor migration  Push online/distance working (e-jobs)  Lack of capacity/experience of tertiary and professional  Learn from other experiences (e.g., industrial village in Japan) institutions to train students Labor Supply:  Lack of specialized training centers  Adopt demand-driven approach: private sector input into  Weak curricula/lack of standards education/training/curricula/programs/skill development  Negative attitude regarding vocational education graduates  Add practical component to education programs;  Competition between providers / focus on quantity rather apprenticeships; internships prior to graduation than quality / focus on inexpensive education and training  Include entrepreneurship programs in vocational schools programs and on the other hand, limited type of relevant,  Attract good graduates into TVET; awareness campaigns for effective and sustainable educational programs pupils, parents, communities to counteract negative  Lack of Active Labor Market Programs for the unemployed perception of women in employment and TVET graduates Other constraints to the education-to-work  Apply modern teaching methods / provide training courses to teachers through local/international experts transition included: the limited size of the labor  Provide scholarships; promote competition among students market compared to the large number of graduates; Intermediation: cultural aspects regarding women’s role in the labor  Monitor graduates labor market status/ tracer surveys market and negative attitudes towards vocational  Build constructive/ positive relationship between the private students, with personal connections dominating sector and education institutes recruitment and graduates unwilling to accept employment below their skill levels; low salaries; Contact MNA K&L: and poor working conditions. Also noted were lack Laura Tuck, Director, Strategy and Operations. of support and capital for new companies, and no MENA Region, The World Bank guidance on further education in high school. Regional Quick Notes Team: Omer Karasapan, , Roby Fields, and Hafed Al-Ghwell Tel #: (202) 473 8177 Gender-specific Constraints: Two focus groups The MNA Quick Notes are intended to summarize lessons learned were asked to identify “four constraints faced by from MNA and other Bank Knowledge and Learning activities. The Notes do not necessarily reflect the views of the World Bank, young women to get into a paid job upon its board or its member countries. graduation.� Women’s constraints related to (a) cultural attitudes towards work and aspects of education and (b) lack of a suitable work environment and salary discrimination. Participants noted that education and training programs are 5 For a more detailed discussion on gender see the companion report to mainly male-oriented; there is a lack of orientation the 2012 World Development Report: “Capabilities, Opportunities and Participation. Gender Equality and Development in the Middle East and on how to reconcile work and home duties; and North Africa Region. � Washington, D.C., The World Bank, 2011. January 2012 · Number 55 · 4