Unequal Labor Market Distribution of Youth in the Arab World: Causes and Potential Solutions

Friday, December 21, 2012
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The Middle East’s youth unemployment rate of 25%, which is amongst the highest in the world, is partially attributable to  severe skills shortages in certain fields and a lack of opportunities for youth in others. Several empirical studies have shown a causal relationship between unequal distribution of qualified youth in different fields in the Arab World and high youth unemployment rates (Kapsos and Sparredom, 2011; Abdul latif et al., 2009; Tamkeen, 2010).

Causes of Unequal Distribution of Qualifications: Are Poor Career Decision Making Processes To Blame?

Arab youths have been found to show little recognition for the need to synchronize early career choices with aspirational values sought after in their careers over the long term. Consequently, the majority of youth in the Arab World when asked if they could ‘go back in time’ to make their career path decisions again respond that they would make a different choice (IFC, 2011). Such findings are indicative of low levels of early career decision satisfaction and high levels of regret in career choices made amongst Arab youth.

In terms of making career specialization decisions, youth in the Arab World rank the following values in order of importance

1. Job satisfaction

2. Good pay and opportunities for personal development

3. Broader contribution of employer

4. Opportunity to work with talented people

5. Opportunity to contribute to development of their country (Asdaa, 2009; Little, 2010).

The ranking of the desire to contribute to the development of their countries by Gulf Arab youth as one of the top values sought after in a career is of particular interest. Such findings suggest that an awareness of the positive economic contribution that efficiency in labor allocation could have on economic development in their countries during the career decision making process may encourage youth to consider career fields that face skills shortages or are otherwise overlooked (IFC, 2011). The ability to influence Arab youth to consider career specializations which face skills shortages early in their careers in the Gulf countries is of significant importance to regional governments in terms of limiting the number of expatriates required in certain fields and promoting private sector employment participation.

 Can ‘Prompting for Value-Ranking’ Influence Career Choices of Arab Youth?

Consumer behavior and decision sciences literature has shown that prompting respondents to rank their values prior to making decisions can yield positive results in terms of post-decision satisfaction and lower levels of regret. In a labor market context, asking youth in the Gulf Arab region to rank attribute values that they consider important when making career choices, prior to actually choosing a career path, could potentially influence the career choices they subsequently make. Commonly accepted theories in the West, such as the cobweb model, show that supply of particular labor market skills is highly related to the economics of a profession, such as expected salary, and other forces that signal ongoing job opportunities and the state of the market such as R&D, output levels, and competition from others with similar skills. However, forces signaling professional opportunity and market health can be more influential in motivating the supply of particular skillsets than salaries. From this perspective, Gulf Arab youth who are sufficiently aware of the contribution their career choice could have on the development of their countries can potentially be influenced to enter fields which they had previously not considered.

While behavioral interventions for better decisions have been found to be effective in Western societies (e.g.Thaler and Sunstein, 2008; Lenton et al., Volpp et al., 2008; Johnson and Goldstein, 2003; Kluger and DeNisi, 1998), including those involving the influence of values (e.g. Wooler, 1982; Ravlin and Meglino, 1987), such interventions have not been thoroughly tested in the  Gulf Arab region. Behavioral interventions affect career decision choice by prompting the decision maker to think through what they want out of a particular choice and the importance of considering values consistency when making an informed career choice. Given the low levels of career decision satisfaction amongst Arab youth, prompting for value ranking can potentially be used as a behavioral decision aid that would establish a mental link between values sought after and career choices, or at least an awareness of such a link (Wooler, 1982).

Our research specifically tests the effectiveness of behavioral interventions in motivating Gulf Arab youths to choose career disciplines which face skills shortages. We started with the working hypothesis that consideration of values in career choices would increase the number of high school and university students and recent graduates who chose or at least considered career paths with a labor supply need. This hypothesis was based on the assumption that respondents confronted with career choices in industries which face skills shortages would seek to align their value of contributing towards the development of their country with career choices that might lead to the resolution of labor market inefficiencies. We also tested more broadly whether better decisions, with regards to post-choice satisfaction, confidence, and fit with preferences, are made, as compared to when not prompted for ‘value-ranking.’ Based on international findings, youth in the Arab World would presumably be more satisfied with their career decisions when attribute value ranking is integrated into the career decision making process (Chernev, 2003).

The Unexpected Results of ‘Prompting for Value-Ranking’ in Career Choice

In contrast to predictions, our research shows that youth in the Gulf stick to more commonly chosen career disciplines rather than those which face skills shortages when prompted to rank career attribute values. Prompting for value ranking, therefore, seems to decrease the likelihood of Arab youths choosing career disciplines characterized by labor market gaps which are outside traditional career disciplines typically pursued by youth in the Gulf.  This reverse influence of the ‘prompting for value’ intervention on career choices emphasizes how unfamiliar youth in the Gulf Arab World are to considering values when making career choices. From a practical perspective, the low availability of information on labor market gaps and disciplines with higher labor demand suggests a low awareness of career disciplines that would satisfy the desire to contribute towards national development by entering fields with significant labor market demand. These findings highlight information asymmetries regarding potential career disciplines that have the potential to satisfy attribute values resulting in the unintended consequence of higher adherence to traditional career options due to high social regard and reputation (Al Omran, 2012).

Our results also illustrate an indifference in subjective measures of decision quality (satisfaction, confidence and perceived fit with preferences) when a behavioral intervention was integrated and when not. This is a potential indicator of the inapplicability of behavioral interventions in the Gulf Arab World due to students being unaccustomed to considering values when making career decisions, a finding that has also been demonstrated in previous research in the Arab World (IFC, 2011).

Potential solutions: In whose hands?

Our results highlight the ineffectiveness of behavioral interventions due to an absence of consideration of values and solid information in career choices of youth in the Gulf Arab World. The use of behavioral interventions depends on the assumption that decision makers have a certain degree of knowledge or awareness that would enable decision makers to ‘spot’ the best choice outcome. This knowledge of what particular occupations will be in demand seems to be absent in the Gulf Arab region (Fasolo and Bonini, 2010).  Addressing the lack of research and statistical information on labor market gaps and attribute values and features of career disciplines with labor demands is critical for youth in the Gulf Arab World to make more informed career choices that would benefit the labor market (IFC, 2011).

Moreover, the effect of myths that some occupations are ‘better’ or ‘inferior’ than others seem to be overriding an interest or consideration of labor market gaps and labor demands of certain disciplines. Therefore, despite the need for better information on labor market gaps in the Gulf Arab region, the power of word of mouth in shaping reputations of career disciplines in Arab societies could potentially override the influence of prompting for value ranking even with higher availability of information in the Arab World (Yousef, 2004; IFC, 2011). Given our evidence, the Gulf Arab World should focus on better information and awareness of prerequisite conditions (i.e. attribute values of career disciplines and labor market gaps) to enable youth to make more informed career decisions consistent with economic development ambitions.

Khamael Al Safi Khamael Al Safi

Khamael Al Safi specializes in the analysis and design of innovative organizational practices, and the development of tools and approaches for the governance of organizations and markets. Khamael has worked for the people and knowledge development functions of several organizations specialized in financial services, non-profit education and media and publishing. She has a particular interest in the role of behavioral decision making in human and organizational development and has focused her recent research on career choices of youth in the Gulf Arab world. She is a recent graduate of the London School of Economics where she studied for a MSc in Organisations and Governance.

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