Economic Research Forum (ERF)

Covid-19 aggravates Jordan’s acute youth employment challenges

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The tough response by Jordan’s government to the global pandemic has protected public health but exacted a sharp economic toll in a country that was already struggling to cope with high youth unemployment and a huge influx of refugees from Syria. This column calls for an urgent international effort to assist the Jordanian government in ensuring a dignified future for vulnerable young people and refugees.

In a nutshell

Jordan’s youth had some of the world’s lowest employment rates prior to the Covid-19 pandemic and ensuing economic downturn.

Young people now face additional obstacles on their path to decent work and adulthood, another blow to a country that has acted as a shock absorber and safe haven in a highly unstable region.

Jordan’s youth are generally well educated, so support from the international community to connect them to tradable service jobs will be critical; such jobs may also be more accessible for young women.

As the Covid-19 pandemic and ensuing global economic crisis endure, the world’s youth are facing an increasingly difficult transition to adulthood. Young people who have recently finished school and are seeking their first jobs are the hardest hit during economic downturns and can potentially experience permanent damage to their career trajectories (Cockx, 2016).

These pandemic-related challenges are greatly exacerbated when pre-existing economic conditions were already highly unfavourable to young people, as is the case in the Middle East and North Africa. The region already had the highest youth unemployment rates and the lowest female labour force participation rates in the world (Assaad et al, 2018; Assaad and Krafft, 2016).

Even under normal circumstances, youth in the region experienced protracted and uncertain transitions to adulthood (Assaad and Krafft, 2020; Assaad et al, 2019b; Dhillon and Yousef, 2009; Gebel and Heyne, 2016), leading to a great deal of frustration and anxiety among young people and their parents, and feeding into political unrest and, in some cases, violence and open conflict.

Although Jordan has been spared the worst of the unrest and violence that has plagued its neighbours, its young people struggled to make successful transitions to adulthood even before the pandemic (Amer, 2019; Assaad et al, 2019b; Gebel and Heyne, 2016).

To its credit, the Jordanian government acted fast to stave off the spread of coronavirus by adopting some of the most stringent lockdown measures in the world. With the curfew that began 21 March (Jordan Times, 2020b), Jordan closed all businesses and banned people from leaving their homes – even to purchase food.

Although rules were gradually relaxed, the curfew lasted 40 days, and activities such as driving and public transport did not resume until 29 April (Al-Khalidi, 2020). As a result, the spread of the virus was limited. As of 12 September, Jordan had only 3,062 confirmed cases and 22 deaths (Worldometer, 2020). The tough government response protected public health but exacted a sharp economic toll.

The economic challenges presented by Covid-19 and the associated lockdown come on top of a decade of difficulties. Jordan was hit hard by the economic and humanitarian crisis that followed the 2011 Arab Spring and Syrian conflict.

After growing at more than 8% per year from 2004 to 2007, Jordan’s economic growth has slowed to an anaemic rate of 2.5% per year since 2011, less than half the rate of growth of its population, which was enlarged by large inflows of Syrian refugees (Assaad and Salemi, 2019). As of June 2020, the World Bank projected that Jordan’s economy will shrink by 3.5% in 2020 (World Bank, 2020a).

Even prior to the pandemic, Jordan suffered from a very high economic dependency ratio, with each worker supporting 3.7 people other than themselves in 2016 (Galal and Said, 2019). This unusually high rate of dependency makes families particularly vulnerable to the loss of jobs and income.

While government actions (Al Nawas, 2020), the labour law, and strong norms around retaining incumbent workers in Jordan have limited layoffs, these measures offer no support to young people who were already struggling to find jobs or are just now graduating into a depressed economy.

Jordanian youth have often temporarily migrated to work in Gulf countries, particularly when job prospects at home have been poor (Malaeb and Wahba, 2019). The pandemic has precluded much new migration and caused many existing migrants to return. Travel restrictions and falling oil prices have sharply curtailed job opportunities for Jordanians in the Gulf.

With remittances from Jordanian workers abroad making up 16% of GDP in 2018 – one of the highest shares in the world (World Bank Databank, 2020) – this has further damaged the Jordanian economy.

The World Bank forecasts that remittances to the Middle East and North Africa as a whole will decline by 20% in 2020 due to lower oil prices in the Gulf countries and the overall global economic downturn (World Bank, 2020b). This shift not only adds to Jordan’s economic woes but also limits an important employment opportunity for its youth.

These severe shocks risk destabilising a country that has played a crucial role over the years as a shock absorber and safe haven in the Middle East. As a stable and well-governed country in a turbulent neighbourhood, it has successfully absorbed repeated waves of refugees from conflicts in Palestine, Kuwait, Iraq and Syria since 1948. Jordan has contributed to the provision of a critical global public good, namely safe refuge for highly vulnerable populations escaping conflict. Jordan’s ability to play this crucial role is now being stretched to the limit.

According to the 2015 population census, Jordan is hosting 1.3 million Syrian refugees in a country of 6.6 million Jordanians, many of whom are refugees themselves from previous conflicts (Department of Statistics, Jordan, 2015a, 2015b).

While refugees can and do work and thus contribute to the Jordanian economy (Fallah et al, 2019; Krafft et al, 2019), the costs of providing for their basic needs have been substantial for Jordan, despite the international assistance it received. The 2017-2019 Jordan Response Plan to the Syrian Crisis had costs of $7.7 billion and was, in 2019, only 40% funded by international donors (Jordan Times, 2020a). Investments in refugee youth and their host communities are critical to preventing a ‘lost generation’ (Brussels II Conference, 2018).

A sustained international effort to assist the Jordanian government in ensuring a dignified future for vulnerable Jordanian youth and refugees is urgently needed. While it is hard to mobilise such a concerted effort in the middle of the widespread economic pain caused by the pandemic, the cost of doing nothing may be the loss of one of the few safe havens and stabilising forces in a region that has already seen a great deal of instability and violence.

The most enduring and effective action would be for international actors to assist Jordan in contributing sustainably to the global economy and in the process creating productive employment for its youth and refugee populations.

While current trade deals have focused on opening markets for Jordan’s manufactured goods (European Commission, 2016), manufacturing is not an area of substantial comparative advantage for Jordan. Jordan has a relatively educated population: 35% of recent cohorts graduated from university (Assaad et al, 2019a). The country is better placed to contribute to trade in services through information services, business process outsourcing and the digital economy.

In order to take advantage of the opportunities for trade in services, Jordan must, with the help of the international community, invest in getting its young people ready for these opportunities. The country needs to build on its relatively strong education system by creating effective bridges for youth into productive employment.

This can be done through targeted and subsidised internships and apprenticeships in the private sector, a concerted industrial policy to encourage international investments in the digital economy, and greater coordination between employers and education and training institutions to produce the relevant skills.

Furthermore, Jordan needs to curtail its reliance on low-paid migrant workers in labour-intensive sectors such as agriculture, construction, and low-end services (Assaad and Salemi, 2019). These sectors need to be made more accessible and more attractive to both Syrian refugees and vulnerable Jordanians; higher visa fees for migrants and employers hiring migrants could help to subsidise apprenticeships for Syrians and Jordanians in these sectors and support employment in Jordan.

Jordan’s youth had some of the world’s lowest employment rates prior to the Covid-19 pandemic and ensuing economic downturn (Assaad et al, 2019a). Young people now face additional obstacles on their path to decent work and adulthood, another blow to a country that has acted as a shock absorber and safe haven in a highly unstable region. Jordan’s youth are generally well educated, so support from the international community to connect them to tradable service jobs will be critical.

Such jobs may also be more accessible for young women. Only 9% of women in Jordan are employed (Assaad et al, 2019a). Vulnerable Jordanians and Syrians can be supported with subsidised apprenticeships, shifting the calculus in favour of Jordan’s residents and away from migrant workers. Support for such initiatives will be critical to preventing a generation already struggling with poor employment prospects from being permanently off-track.

Further reading

Al-Khalidi, S (2020, 29 April) ‘Jordan Lifts Driving Ban as It Eyes Normality after Tight Lockdown’, Reuters, Amman.

Al Nawas, B (2020, 2 April) ‘Public, Private Sector Employees Entitled to Full Salary during COVID-19 Work Stoppage – Labour Ministry’, Jordan Times, Amman.

Amer, M (2019) ‘School-to-Work Transition in Jordan, 2010-2016’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

Assaad, R, Hendy, R, Lassassi, M, and Yassin, S (2018) ‘Explaining the MENA Paradox: Rising Educational Attainment, Yet Stagnant Female Labor Force Participation’, IZA Discussion Paper Series No. 11385.

Assaad, R, and Krafft, C (2016) ‘Labor Market Dynamics and Youth Unemployment in the Middle East and North Africa: Evidence from Egypt, Jordan and Tunisia’, ERF Working Paper No. 993.

Assaad, R, and Krafft, C (2020) ‘Excluded Generation: The Growing Challenges of Labor Market Insertion for Egyptian Youth’, Journal of Youth Studies.

Assaad, R, Krafft, C, and Keo, C (2019a) ‘The Composition of Labor Supply and Its Evolution from 2010 to 2016 in Jordan’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

Assaad, R, Krafft, C, and Salemi, C (2019b) ‘Socioeconomic Status and the Changing Nature of the School-to-Work Transition in Egypt, Jordan, and Tunisia’, ERF Working Paper No. 1287.

Assaad, R, and Salemi, C (2019) ‘The Structure of Employment and Job Creation in Jordan: 2010-2016’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

Brussels II Conference (2018) We Made a Promise: Ensuring Learning Pathways and Protection for Syrian Children and Youth.

Cockx, B (2016) ‘Do Youths Graduating in a Recession Incur Permanent Losses?’ IZA World of Labor 281: 1-11.

Department of Statistics, Jordan (2015a) ‘Table 8.1: Distribution of Non-Jordanian Population Living in Jordan by Sex, Nationality, Urban/ Rural and Governorate’, Population and Housing Census 2015, retrieved 3 November 2017.

Department of Statistics, Jordan (2015b) ‘Table 3.5: Distribution of Population by Population Category, Sex, Nationality, Age in Single Years and Governorate’, Population and Housing Census 2015, retrieved 1 October 2017.

Dhillon, N, and Yousef, T (2009) Generation in Waiting: The Unfulfilled Promise of Young People in the Middle East, Brookings Institution Press.

European Commission (2016) ‘Decision No 1/2016 of the EU-Jordan Association Committee’, Official Journal of the European Union 59: 6-38.

Fallah, B, Krafft, C, and Wahba, J (2019) ‘The Impact of Refugees on Employment and Wages in Jordan’, Journal of Development Economics 139: 203-16.

Galal, R, and Said, M (2019) ‘The Evolution of Wage Formation and Inequality in Jordan, 2010-2016’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

Gebel, M, and Heyne, S (2016) ‘Delayed Transitions in Times of Increasing Uncertainty: School-to-Work Transition and the Delay of First Marriage in Jordan’, Research in Social Stratification and Mobility 46(A): 37-49.

Jordan Times (2020a, 5 February) ‘Jordan Response Plan to Be Announced This Month –  Planning Ministry’, Amman.

Jordan Times (2020b, 21 March) ‘Authorities Arrest 392 Curfew Violators on Saturday’, Amman.

Krafft, C, Sieverding, M, Salemi, C, and Keo, C (2019) ‘Syrian Refugees in Jordan: Demographics, Livelihoods, Education, and Health’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

Malaeb, B, and Wahba, J (2019) ‘Migration Dynamics during the Refugee Influx in Jordan’, in C Krafft and R Assaad (eds), The Jordanian Labor Market Between Fragility and Resilience, Oxford University Press.

World Bank (2020a) June 2020 Global Economic Prospects.

World Bank (2020b, 22 April) ‘World Bank Predicts Sharpest Decline of Remittances in Recent History ‘.

World Bank Databank (2020) World Development Indicators, retrieved 4 June 2020.

Worldometer (2020) Coronavirus Update, 12 September 2020.

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