The promise and peril of youth entrepreneurship in the Middle East and North Africa

Abstract

PurposeEntrepreneurship is promoted as a solution to high rates of youth unemployment around the world and especially in the Middle East and North Africa (MENA). This paper investigates the potential for youth entrepreneurship to alleviate unemployment, focusing on Egypt, Jordan and Tunisia.Design/methodology/approachThe authors examine who entrepreneurs are (in comparison to the unemployed), using multinomial logit models. The authors compare entrepreneurs and wage workers working conditions and earnings. They exploit panel data to assess earnings and occupational dynamics. They specifically use the Labor Market Panel Surveys of 2012 (Egypt), 2016 (Jordan), and 2014 (Tunisia), along with previous waves.FindingsThe authors find that entrepreneurs are the opposite of the unemployed in MENA. The unemployed are disproportionately young, educated and women. Entrepreneurs are older, less educated and primarily men. Entrepreneurship does not generally lead to higher earnings and does have fewer benefits.Originality/valuePromoting youth entrepreneurship is not only unlikely to be successful in reducing youth unemployment in MENA, but also, if successful, may even be harmful to youth.