Youth Unemployment in Armenia: Causes and Research Proposal

Introduction: Armenia's Youth Unemployment Crisis

Youth unemployment rates in Armenia are at an all-time high, but what is driving their increase? Unemployment rates are defined as the proportion of individuals who are currently jobless but are actively seeking employment within the preceding four weeks (Bureau of Labor Statistics, 2009). It is particularly striking to observe such a high youth unemployment rate given that the general adult unemployment rate in Armenia actually decreased from 7.1% in 2007 to 5.9% in 2011 (Index Mundi, 2012), yet unemployment among the youth continues unabated and shows no tendency to decline. Several negative outcomes are associated with youth unemployment, including prevention of socialization in the labor market, negative social consequences, cycles of dependence on parents, and an increased likelihood of drug or alcohol consumption (World Bank, 2007). This paper investigates the possible causes of youth unemployment in Armenia and proposes to test whether these variables persist and, if so, to what extent.

Armenia is a relatively young country, and youth aged 15–24 comprise approximately 18.5% of the population. There is a high unemployment rate among this group, and as a result many are emigrating (I Matter Armenia, 2012). The CIA (2012) records that "Armenia and Macedonia have the two highest youth unemployment rates of countries anywhere in the world," with Armenia leading at 57.7%. In other words, Armenia holds the dubious distinction of having the steepest youth unemployment rate on the planet — a figure that surpasses those of developing countries and nations experiencing the stress of war. This high and rising long-term unemployment rate points to serious economic strain.

In May 2007, the World Bank released a significant report on Armenia's labor dynamics, including a chapter on "Youth Employment and Unemployment." The National Statistical Service (NSS) noted that over one-third of youth aged 15–24 neither worked nor studied. Such a large number was alarming because it prevents socialization in the labor market and may propagate anti-social behavior such as alcohol consumption, drug use, and crime. Still more concerning was the significant number of young people who had not only dropped out of the labor market but had stopped looking for work altogether (Social Science in the Caucasus, 2007).

In 2001, the World Bank released census data showing that the net enrollment rate of young people aged 15–24 in education in Armenia was 35.8%, while 28.7% of this age group were employed — meaning the unemployed share of youth was nearly as large as the share enrolled in academic institutions (WorldBank.com, 2010). Unemployment may not be attributable to laziness or low educational attainment, since relatively few youth drop out of the compulsory education system and many do migrate in search of employment, demonstrating a willingness to work. According to the 2001 census, youth constitute approximately 18% of the civil labor force. Nonetheless, prime-age adults make up nearly triple the youth share of Armenia's labor force. By 2003, the ratio of youth to adult unemployment was 2.5 and growing (ibid).

Today, unemployment among Armenian youth reaches 48.9%, with more young women (56.6%) unemployed than young men (43%) (YouthBank Armenia). Many young people therefore leave the country in search of employment, traveling primarily to the Russian Federation or to other states in the Commonwealth of Independent States.

Sociodemographic Characteristics of Registered Unemployed Young People in Armenia

The table below illustrates Armenia's position in global rankings of youth unemployment among those aged 15–24 (CIA, 2012; WorldBank.org, 2010):

Global Youth Unemployment, Ages 15–24

1. Armenia — 57.6% | 2. Macedonia — 54.9% | 3. South Africa — 48.2% | 4. Bosnia and Herzegovina — 47.3% | 5. West Bank — 46.9%

In 2005, two youth-related surveys were conducted to investigate the characteristics of the Armenian youth labor market. One study surveyed youth registered at the State Employment Service (SES), while the other surveyed students in vocational education establishments, including primary vocational and secondary specialized schools. Results found that 46% of surveyed households had only one employed member, 23% had at least two employed members, and only 4% had three or more. The research also found that parents of registered unemployed young people had mainly secondary general or secondary specialized education, with approximately 15–17% of parents of unemployed youth having completed higher education. The researchers concluded that low parental education may partially explain the high degree of youth unemployment in Armenia. The majority of unemployed youth came from households with a low living standard: 77% estimated their household income at 50,000 drams, or approximately 10,000 drams (US$20) per person per month.

The report also found that unemployed youth themselves had low levels of education and little motivation to continue their studies. Those who wished to continue faced negligible or non-existent financial opportunities to do so. Only 43% of respondents had completed vocational education of any level, while only 13% had completed higher education. Women were 1.7 times more likely than men to have completed higher education. Respondents cited the following reasons for not continuing their studies: failure to gain acceptance into vocational or higher education institutions (32%), financial constraints and the need to work instead of studying (29%), and lack of interest in continuing studies (27%) (YouthBank Armenia).