Intergenerational Transmission Of Unemployment For The Male Youth In Jordan

Introduction

History brief

Following the World War I and the break of the Ottoman Empire, the League of Nations has appointed Britain to perform the governance of much of the Middle East. Demarcation of the Transjordan, a semi-autonomous region, from Palestine in the early 1920s followed briefly with Transjordan having gained independence in 1946 and changing the name to the Hashemite Kingdom of Jordan, as it has nowadays. King Hussein, was ruling the country during 1953-1999 period, at the same time successfully navigating among competing pressures from the major world powers: UK, US, USSR; as well as Arab states, Israel, and Palestinians. Having lost the West Bank to Israel during the Six-Day War of 1967, the King of Jordan has permanently ceased claims to that territory in 1988. He then signed a peace treaty with Israel in 1994. King Abdullah II, the eldest son of King Hussein, has succeeded the throne after his father's death in 1999. Having implemented modest political reforms, for example a new electoral law in early 2016, ahead of legislative elections of September, as well as the significant economic liberalization and reforms for the promotion of growth and addressing chronic budget deficit.

Overview

Land. The country has an area of 89,213 km2 of vast natural and ecological diversity. The drive from Amman, in the mountains, to the shores of the Dead Sea, is a descent of 1,200 m in less than an hour. Most of the land is desert plateau, but the uplands are temperate and the Jordan Valley semitropical. Jordan borders Syria to the north, Iraq to the east, Saudi Arabia to the southeast and south, and Israel and the West Bank to the west. 26 km frame the coastline part of the country (Gulf of Aqaba, southwest) with Al-Aqabah the only port.

Population. Jordan’s population is approximately 9,5 million (6,6 million Jordanians and 2.9 million non-Jordanians). Jordan’s capital, Amman, has 4 million inhabitants. Country’s population is considered as young: over 70% is 0. This correlation generally biases OLS estimates of equation (1) in the sense that is not reflecting the causal effect of paternal unemployment history, only. The biased estimate, instead, mixes the effects of family background and paternal unemployment. The challenge is to determine which part is causal and which reflects the influence of family background. Both effects are interesting but have different policy implications. In previous studies three methods have been used to disentangle family background and true causal effects. Ekhaugen (2009) compares siblings who have been at different ages at the time of parental unemployment. On the basis of assumptions about the age after which parental unemployment does and does not affect a child's employment outcomes, sibling differences can net out the effect of family background. Other scholars estimate the system of equations (1) and (2) and either model cov(; ) within a bivariate probit frameworkor apply a two-stage least squares approach (2SLS). The 2SLS approach requires that at least one instrumental variable which strongly affects father's unemployment risk is exogenous (conditional on covariates) in equation (1).

Although the bivariate probit can identify without exclusion restrictions, corresponding estimates are typically not robust to slight changes in specification. Hence, also for the bivariate probit at least one exclusion restriction is recommended.

Data sampling

Sex and age. Despite the overwhelming presence of various data, in the course of the current research it was decided to follow the classical line of research of “fathers–sons”, male line. The Hashemite Kingdom of Jordan has one of the youngest populations in the world, with 40% of the population under the age of 18 and 71% under the age of 30. The concept of “youth” was discussed above with defining the age range as 15-24 y.o., according to the competent international organizations. Though, in this paper, the age range would be shifted, with starting from 18 y.o. – the estimated age of finishing the secondary education. This age is especially critical, despite the possible dropout during secondary education, at 18 y.o. a son has to decide which path to follow: to drop out with a certificate on completion the secondary education and help family being informally employed, enter vocational training or continue to the higher education. The upper bound of the age span – 26 y.o – would remain the same, since, as estimated, this age corresponds to the maximally possible age of completion of Bachelor’s Degree (in Medicine, 6 years) with the Master’s Degree following (2 years). It is assumed that during the secondary education (up to 18 y.o.) sons are supported by their families so sons’ unemployment is accounted only for the specified age span 18-26 y.o.