Youth unemployment is a serious policy challenge in Egypt. Unemployment affects the young and the educated. According to recently announced statistics from Egypt’s Central Agency for Public Mobilisation And Statistics (CAPMAS), the unemployment rate among youth has reached 26 per cent.

The largest educated group among the unemployed is university graduates. "Educated unemployment," as often described in the literature, is a historical challenge in modern Egypt with documentation of the phenomenon dating back to the time of the British tutelage.

However, unemployment is not the only problem in relation to the labour market in Egypt. Unemployment figures actually fail to provide an adequate understanding of the situation of youth in the labour market.

Informal employment (understood as lack of access to work contracts or social insurance) is a key challenge that receives less policy attention than it should, despite its gravity. Informal employment has a serious impact on the quality of jobs in Egypt among working youth.

Recent survey data shows that informal employment is the norm, even among educated working youth. Among wage workers with secondary education and above, only 42 per cent have access to work contracts. This figure is drastically depressed to six per cent among those with less than a secondary education. More than 60 per cent of young workers are employed in small and micro enterprises, most of them operating within the informal economy.

Access to other work benefits, primarily contributory social insurance schemes, is contingent on their access to a work contract, according to current regulations. These figures explain why only one quarter of employed youth express satisfaction about their jobs in survey results.

Different data sources show that the only group that enjoys such benefits are employed in the public sector and the civil service. This can explain the continued preference for this sector of employment among youth.

In fact, the difference in job quality parameters between the predominantly informal private sector and the public sector induces many young people to queue for jobs in the latter. Interviews show that these young men and women would choose unemployment over a job with compromised benefits, or a “bad” job as described in the World Bank literature. The decent work deficit, as dubbed by the International Labour Organisation, is therefore a key challenge.

Meanwhile, there are two key issues that remain central to our understanding of the situation of youth in Egypt’s labour market. First, the face of unemployment in Egypt is that of young women. In absolute numbers, the number of unemployed young women is more than double that of unemployed young men (1.3 million young women as opposed to 0.6 million young men, according to data of the School to Work Transition Survey of 2013).

The unemployment rate among female youth is more than five times that among male youth according to the same source. In fact, if women in the working age population in Egypt (15-65) had the same unemployment rate of men, the national unemployment rate would drop to less than 10 per cent, according to data published in 2015 by CAPMAS.

Second, there are very few entrepreneurs among youth in Egypt. Despite the increasing emphasis on entrepreneurship as a solution to youth unemployment, self-employed youth constitute less than seven per cent of working youth. These entrepreneurs are primarily reliant on family for funding, showing the limitation of institutional financial support mechanisms. Young entrepreneurs list lack of finance and market competition as their key problems.

Youth unemployment can be understood as a symptom of compromised job quality within the informal economy. It becomes a choice for many to be unemployed rather than be in a bad job.

It is, therefore, vital to address job quality issues as the gateway to address youth unemployment. Incentivising regulations addressing access to contributory social insurance schemes for workers within the informal economy remains a key policy approach. Similarly, support to small and micro-enterprises, a main employer in Egypt, is bound to improve job quality within this large sector.

The writer is assistant professor at the School of Global Affairs and Public Policy at the American University in Cairo (AUC). Her research focuses on issues of youth, gender, employment and poverty.