Graduate Unemployment in Iran: Root Causes and Remedies

EghtesadOnline: The unemployment of a great portion of university graduates is an issue afflicting the Iranian society.

News ID: ۷۸۳۳۱۱

18 July 2018

In an article published in Financial Tribune’s sister newspaper Donya-e-Eqtesad, two graduates of social sciences, Ali Shirinabadi and Taqi Rahimi, looked into the causes of the problem and proposed suggestions to alleviate the deficiency. Excerpts of the article follow:

Four core problems cause the current state of affairs:

Firstly, the number of universities and colleges has increased from a mere 40 prior to the 1979 Islamic Revolution to more than a thousand, without equipping university graduates with the necessary skills and “sacrificing quality for the sake of quantity”.

Secondly, the rise in the number of higher education centers has not been on par with the demands of policymakers in the field of employment. In other words, universities have been accepting students without knowing the needs of entities, such as the Ministry of Cooperatives, Labor and Social Affairs, the Ministry of Economic and Finance Affairs and the Office of Administrative Affairs and Recruitment. This has led to the overflow of graduates whose skills cannot be used in the job market.

Thirdly, the huge increase in admissions in basic science and humanities, considering that they are mostly theory-based, has led to an influx of  graduates lacking the skills to function in work environments. As the job market has very limited need for graduates of such fields, it has resulted in a high number of graduates remaining unemployed for a long time.

Fourthly, Iran, as a developing country, is dealing with an array of economic problems both internally (low productivity and high production costs) and externally (foreign sanctions and banking restrictions). Under the circumstances, many private firms are forced to lay off workers or close sections to survive the economic headwinds. This, in turn, leads to the unemployment of a large portion of graduates.

Disuse of young members of the society means losing a golden opportunity that will not recur for many decades, an opportunity yearned by developed countries and ignored by Iranian policymakers.

At the end, the authors make the following suggestions to help improve the situation:

To begin with, job-seekers should be allowed to take out low-interest and long-term entrepreneurship loans, provided they undergo proper training in the field.

A nationwide portal should be formed for eligible graduates to sign up. Employers should get access to the data so that they can contact the graduates when they require new workforce.

Motivational policies, such as tax reduction for people who employ new graduates, should be taken into consideration.

Last but not least, job counseling centers should be set up to liaise between graduates and prospective employers.

Surprisingly, a recent research presented at the Second Conference on Iranian Economy in Tehran in December 2017 showed higher education raises an Iranian individual’s odds of remaining unemployed.

The report says individuals who did not have a university degree were more likely to find a job in Iran over the past three years; in fact their chances of remaining jobless were less than 20% against 48% for university-educated people.

Educated women have even a slimmer chance of landing a job. According to the report, an urban educated woman is 56% more likely to remain unemployed while the odds of unemployment for an educated woman living in rural areas were 62%.