Youth Unemployment In The Uae Economics Essay

The UAE recent political uprisings require an urgent and imminent response which has demonstrated in context to the increasing youth unemployment in the region respectively. This brings revolutions in the labors and workforces of the UAE, which resulted in the economic inequality and social chaos. These transitions have effectively raised levels of engagement, increased expectations region-wide and accelerate changes in public emotion. In order to overcome with these issues, region is focusing on the socio political framing with innovative thinking and responses (GCC hit by high youth unemployment, 2012).

According to the World Bank data, the six states of the Gulf Cooperation Council have highest youth unemployment rate i.e. forty percent approx in the world. The six states consist of Oman, Bahrain, Qatar, Saudi Arabia, the UAE and Kuwait. There are various factors behind this rate of unemployment but the major key factor is the difference between the skills garnered through educational system and the skills required by the private sector in the GCC countries. According to the enterprises in the region, shortage of appropriate skills is the greatest obstacle they found in hiring employees. In the same context, according to the Global Competitiveness survey of the World Economic Forum’s, “inadequate- educated force” is the fourth challenging factor in the Arab World in hiring employees and remaining three factors are restrictive labour regulations, inefficient government bureaucracy and financing of the region (GCC hit by high youth unemployment, 2012). It is emphasized that inadequate education does not refers to the no education and indeed, unemployment in the Arab world is high among the most educated youth (GCC hit by high youth unemployment, 2012)

Youth employment and labor market characteristics in the UAE:

In the UAE, the employment ratio is decreasing gradually day by day. The youth of UAE facing number of challenges related to the qualification, skill and job opportunity. In the UAE, the total unemployment work force is 4 % according to the World Bank record and the unemployed labor work force ratio for male and female 7.9% and 21.8% respectively. In the Gulf region, the unemployment is higher than the other regions. This situation represents the under utilization of human capital. As per the worlds bank report the UAE needs to crate 40 million jobs to accommodate with the labor market or near the 4 millions jobs per year (GCC hit by high youth unemployment, 2012).

Labor Market Characteristics in UAE:

The Labor market is very divergent in UAE to the other countries. Because of some reasons such as immigration of labor, the ratio of male is higher than the females in UAE. Most of the labor in the country is comprises of non- citizen. And most of the UAE citizens are working in the public sector or semi government sector. There are no fixed criteria for salary for the employee according to their designation. Though in result the range of pay is differ by organization to organization for the same designation.

Inflation rates and cost of living are also major factors to determine the pay scale. In emirates employees have different pay scale due to these reason, The Abu Dhabi paying highest remuneration package in comparison to the other region in Emirates (Khaimah, 2008).

UAE Labor force and Employment 2005-2008:

Year

Population

Labor Force

15 years and above

Employed

2008

4.765

3.043

2.930

2007

4.488

2.840

2.742

2006

4.229

2.647

2.563

2005

4.106

2.560

2.480

2a-Profile of UAE population based on ages in the UAE

The total population of UAE is the 8,264,070 as per the National Bureau of Statics UAE. The migration rate of UAE is 21.71%. The population growth of the UAE is the 4.93 % in 2011 as per published by the World Bank in 2012. The population on the basis of age factor can be divided into three category that is (Trading Ecomics, 2012)-

Population age below the 15

Population age between 24-64

Population age between above 64

Years

Percentage

Population age below the 15

16.84%

Population age between 15-64

82.72%

Population age between above 64

0.44%

A s per the worlds Bank Report , theTotal Population growth is 4.93% in 2011.

As the shown in figure, it can be interpreted that from the total population of the UAE that population ration of age between below the 15 is very less which is 0.44% of the total population. And there is the large ratio of youth and adult in UAE, which lies between the Ages 15-64 is large 82.72% of the total population and for the 16.84 % statics of the total population represent the Age above 64.

2b- Trends on youth unemployment:

For the UAE youth unemployment is a major problem, the rate of unemployment is rose gradually day by day and this is affecting the Arab region. On the basis of the demographic factor the ages of 15-24 groups called the youth. More than 20% of youth is facing many challenges in finding jobs. And especially in the Gulf region the ratio of unemployed youth is high for the reason of the education, skills and job opportunities. Special for the Female youth facing main problem in UAE because of some social norms, gender biasness, male dominance and cultural differences and it increase the gender gap in unemployment it is wider in Gulf region ( Youth in the Arab Region.).

UAE youth unemployment is three times 12% of the overall unemployment rate that is 4% According to the report Female unemployment is of 28.1% as compared to the male which is 7.8%.

Total Unemployment youth in UAE

Youth Age

Percentage

15-19

27.3%

20-24

28.0%

25-29

14.3%

30-34

1%

From the above figure shown in for the youth employment in UAE it can be interpreted that there is the unsatisfactory conditions in the UAE for the youth specially between for the Age of 15-24 youths its shows the 27- 28 % for the unemployment. For the age 25-29 the ratio shows 14.3%. These facts and data show the effect o and its cost the economy and society (Trading Economics, 2012).

Youth Percentage of the Total Population in the UAE:

In Arab region UAE has the highest youth unemployment rate in the world. In today’s scenario UAE facing many challenges and it affects the socio economical conditions in UAE. The current challenge facing by the country is the high proportion growth of youth (15-24) in comparison to the other age group in UAE and its c reating the Unemployment problem in the region. Every year more than 500000 people enter in the labor market in the ESCWA (Economic and Social Commission for Western Asia), most of them are youth. The figure shown below represents the youth percentage of the total population in the Arab region UAE form the year 1980-2010 (Commission, 2011).

Year

Youth Percentage of the Total Population in the UAE, 1980-2010

1980

19.5%

1985

19.7%

1990

19.4%

1995

19.9%

2000

20.8%

2005

20.9%

2010

19.9%

As per the analysis shown in the above figure it can be interpreted that the population of youth is increasing form the last decades its increases year by year gradually. As we analyze in the figure there some variation are shown from the year 1980-2010. In the year 1985 the percentage for the youth was 19.7% it increased by the year 1980 which was 19.5 %. As we analyze the data from the year 1995 to 2005 there are increasing the value (percentage) steadily which is increased by 2.15% .As the percentages increasing for youth causes problem of Unemployment in the UAE.

2c- Percentage of males and females over the years:

In the Gulf region, female unemployment is consistently higher than that of men. According to the data of year 2010, the report showed that the percentage of female unemployment is 28.1 % while the male unemployment is 7.8 % (Trading Economics, 2012). This problem represents significant underutilization of the human capital.

Percentage of males and females in the UAE in the year, 2010

This is a report of the unemployment in the UAE of the year 2010. It explores that female youth unemployment is very high as compared to the male. Indeed youth unemployment in the UAE is three times of overall rate of the unemployment in the UAE. According to the report, it is found to 12.1% Vs of the 40% (GCC hit by high youth unemployment, 2012). This unemployment process is continuous form years as shown following:

Table for youth unemployment (Male & Female) over the years in the UAE:

S. No

Year

Age group

Sex

Youth Unemployment Rate

Share of Youth Unemployed in total unemployed (%)

1

1995

Youth: 15- 24

M

6.40

45.8

2

1995

Youth: 15- 24

F

5.70

53.5

3

2000

Youth: 15- 24

M

45.8

4

2000

Youth: 15- 24

F

53.5

5

2005

Youth: 15- 24

M

6.50

30.0

6

2005

Youth: 15- 24

F

12.90

41.0

7

2010

Youth: 15- 24

M

7.90

46.6

8

2010

Youth: 15- 24

F

21.80

36.3

Source: (Youth Unemployment by Gender)

Graph Analysis of Youth Unemployment:

It has been analysed from years that female youth rate of unemployment is contineously higher than the rate of male youth unemployment. Thus, it has been found that total rate of unemployment is reducing over the years. As in the year of 1995 and 1996, it was constant i.e. 98.3% while in the year of 2008 it was 82.9 %. The UAE is adopting several practices in order to reduce youth unemployment from the rgion but due to expatriats and inadequate education system, the rateof youth unemployment is reducing in very less part (Youth Unemployment by Gender).

Graph analysis of share of Youth Unemployed in total unemployed

Source: (Youth Unemployment by Gender)

This graph explores that the unemployment of women is decreasing over the years in the UAE but in the same year, percentage of rate of youth male unemployment is increased.

2c1-Based on the Level of Education:

In the UAE, secondary education is questioned by the results of large number of surveyed. As per the result of the survey it has been found that the higher education and secondary school education did not adequately prepare students for the challenges and realities of the work. It requires improvement in the teaching style in both languages English and Arabic. There is a significant impact on the unemployment which is based on the level of Education (Unemployment among Emirati youth – findings of Emirates Foundation sponsored research, 2009).

Based on the Primary Education:

According to the report of the International Labour Organization, the unemployment with primary education in the UAE was reported at 45.3 % in the year of 2008. It has been analyzed by the graph that the level of unemployment of primary education has been reduced from previous year in context to the female while it found to be increased for male. This data is in context to the rate of male and female unemployment percentage in the UAE under which percentage of total male unemployment with primary education was 36.5 % and rate of female unemployment was 8.8% (Unemployment based on Level of Education).

Gender

Year

Total Unemployed(`000)

Primary Education (%)

Male

1995

20.4

45.0

Female

1995

3.7

12.6

Male

2000

55.4

30.4

Female

2000

24.4

10.4

Male

2005

30.3

36.5

Female

2005

46.9

8.8

Source: (Unemployment based on Level of Education)

Graph analysis on the basis of table: Unemployment with Primary Education (Male & Female)

Based on the Secondary Education:

According to the report of the International Labour Organization, the unemployment based on the secondary education in the UAE was reported at 73.1 % under which 36.4% for unemployment among males and 46.7 % for unemployment among females (Unemployment based on Level of Education). It has been analyzed from the table that percentage of female’s unemployment is slightly higher than the rate of male’s unemployment. This data is in context to the rate of male and female unemployment percentage in the UAE as per the report of the year 2008 (Unemployment based on Level of Education)

Gender

Year

Total Unemployed(`000)

Secondary Education (%)

Male

1995

20.4

20.8

Female

1995

3.7

35.5

Male

2000

55.4

32.2

Female

2000

24.4

44.7

Male

2005

30.3

36.4

Female

2005

46.9

46.7

Source: (Unemployment based on Level of Education)

Graph analysis on the basis of table:

Figure : Unemployment with Secondary Education (Male & Female)

Based on the Tertiary Education:

According to the report of the International Labour Organization, the unemployment based on the secondary education in the UAE was reported at 60.9 % under which 17.9 % for unemployment among males and 43.0 % for unemployment among females (Unemployment based on Level of Education). It has been analyzed from the table that percentage of female’s unemployment is considerably higher than the rate of male’s unemployment. This data is in context to the rate of male and female unemployment percentage in the UAE (Unemployment based on Level of Education)

Gender

Year

Total Unemployed(`000)

Tertiary Education (%)

Male

1995

20.4

15.2

Female

1995

3.7

49.0

Male

2000

55.4

13.5

Female

2000

24.4

39.8

Male

2005

30.3

17.9

Female

2005

46.9

43.0

Source: (Unemployment based on Level of Education)

Graph analysis on the basis of education:

Figure : Unemployment with Tertiary Education (Male & Female)

Graph Analysis of the UAE Unemployment data of year 2008 (Male & Female):

Source: (Richard Shediac)

NS= No Schooling

PPE= Pre Primary Education

LE= Lower Education

UE = Upper Education

NTE = Non Tertiary Education

TE = Tertiary Education

STE= Secondary Tertiary Education

After analyzing on all the levels of the education it has been found that percentage of the female unemployment is considerable higher than the percentage of the unemployment in male. In the same context unemployment on the basis of secondary education is very high in comparison of other level of education. Thus, secondary level of education in the UAE requires several modifications in terms of system of teaching and command on language as in the report published by AMEinfo.com (Unemployment among Emirati youth – findings of Emirates Foundation sponsored research, 2009).

Policy that the government imposes in order to decreases number of unemployment:

In order to overcome with the issue of the unemployment, the UAE government imposes several new policies such as Emiratization, Restrictive Labour Immigration Policies and Workforce Nationalization etc. The youth unemployment becomes crucial issue to solve to prevent immigration of the emirates as well as to enhance economics of the region. After the education system of the UAE, the major reason of unemployment is that approx ninety percent of the workforce is expatriate employees and also the role of private sector is not appropriate in job creation and ineffective policies. Government adopts following policies:

To enhance education system, government is trying to improve the structure of vocational training, alignment with the industry and science curricula.

Government is reserving certain amount of the quota for UAE national’s worker in the recruitment policies of organizations.

Government readdressing and changing existing policies.

Implementing several training and development programmes.

Correlation Relationship:

Age-Gender

S. No

Years

Percentage of Male

Percentage of Female

Youth Age percentage under unemployment (%)

1

1995

45.8

53.5

19.9

2

2000

45.8

53.5

20.8

3

2005

30.0

41

20.9

4

2010

46.6

36.3

19.9

(Please refer attachment of Excel Sheet)

Coefficient Relation between Male & Age is -0.65375

Coefficient Relation between Female & Age is 0.110889

Age-Level of Education:

Coefficient correlation between Age & Primary Education (Male) is -0.86788.

Coefficient correlation between Age & Primary Education (Female) is -0.94216

Coefficient correlation between Age & Secondary Education (Male) is 0.985198.

Coefficient correlation between Age & Secondary Education (Female) is 0.997014.

Coefficient correlation between Age & Tertiary Education (Male) is 0.219576.

Coefficient correlation between Age & Tertiary Education (Female) is -0.90451.

Conclusion: