Iranian Youth in Times of Economic Crisis

Djavad Salehi Isfahani
Djavad Salehi Isfahani
Djavad Salehi Isfahani Professor of Economics - Virginia Tech

October 11, 2010

Young people in Iran have emerged as important players on the country’s political scene but remain marginal on its economic scene. They were a vital part of President Khatami’s political base and contributed to his landslide victories at the polls, in 1997 and 2001. In June 2009 they again played a key role, this time in challenging President Mahmoud Ahmadinejad’s controversial reelection, which led to massive anti-government protests in the nation’s largest cities. A year later the political crisis appears to have subsided, but the economic crisis that has engulfed the country since early 2008 has deepened, and with it the crisis facing Iran’s youth. Youth unemployment is at record high levels and, for the majority of youth, marriage and family formation are increasingly becoming challenges to overcome rather than celebrations of reaching adulthood.

The economic recession has drastically reduced the economy’s ability to absorb new workers just as the number of young people entering the labor market reached its highest level ever. While the challenges facing youth are at an all time high, the major policy initiatives pushed by the Ahmadinejad administration address issues that have little to do with youth—reforming energy subsidies, offering incentives for families to have more children, and amending the family laws to tighten the conditions governing temporary marriage. These initiatives and a general form of policy paralysis following the political upheavals of last summer have prevented the government from addressing young people’s problems.

Studies show that Iranian youth face difficult transitions through school, from school to work, and to marriage and family formation. These and other studies of Iranian youth have documented how the period between adolescence and adulthood has over time become longer and filled with more frustration and anxiety, a condition common enough in the Middle East to have received its own expression – “waithood”. The old panacea that promised youth better futures through more education no longer seems to work in Iran; educated youth often find transition to adulthood more difficult than less educated youth. They seem to wait longer to find their first job after graduation, to delay marriage more, and to stay longer in their parents’ home. Unfortunately, these long periods of waiting are not spent in building human capital, saving for a home, or other activities that signal hope. For youth with the means, these periods are largely spent in idleness, in seeking degrees and diplomas that may not add to their productive skills, or in preparing for greener pastures abroad. Those without the means to pursue such options, leave school earlier to take up temporary jobs that neither provide stepping stones to future careers nor improve their chances of marriage and family formation.

In this paper, I review the evidence on youth transitions in Iran, using recent survey data for 2007 and 2008, to show how the economic crisis since 2008 has affected youth transitions to employment and to marriage. I also show how transitions differ by family background and by region of residence – rural and urban. While in many ways “waithood” is a phenomenon that cuts across social classes in Iran, disadvantaged youth sometimes face greater challenges in transitions to employment and marriage.

The next section begins with a presentation of Iran’s rapidly changing demography, which is a major influence on young peoples’ lives. Thanks to a baby boom in the early years of the Islamic Revolution, roughly around 1979-1984, the cohorts of young people reaching adulthood in the last few years have been by far the largest in Iran’s history. Iran boasts the highest share of 15-29 year olds in total population of any country in the world. Even a well-functioning economy would have difficulty absorbing new cohorts into the labor market when they outnumber the retiring cohorts 6 to 1. Iran’s peculiar demography has also affected the marriage market in adverse ways. The baby boom women of Iran have reached marriage age several years before the men from the same cohorts, thus facing the smaller older cohort of marriage-age men, causing a classic “marriage squeeze,” or a shortage of men – about four men for every five women of marriage age. The sections that follow present an analysis of the transition from school to work and to marriage.

Read the full report at Dubai School of Government » (pdf)