The role of the Social and Solidarity Economy (SSE) in the process of job creation and formalisation of the informal economy has been understudied. This policy study aims to examine the issue of widespread youth employment in the Middle East and North Africa (MENA) region and the mismatch between labour supply and demand to promote the creation of start-up businesses to formalise these enterprises. To do so, the authors of this paper analyse this issue in the context of six countries, three in North Africa – Egypt, Morocco and Tunisia – and three in the Middle East – Jordan, Lebanon and Palestine. They do so by using figures of informal employment, a database compilation and interviews with experts on this subject.

The study comprises four different sections that tackle different aspects of the job creation potential of the social economy. The first chapter compiles microdata from four Labour Market Panel Surveys and Economic Research Forum COVID-19 MENA Monitor Surveys to assess employment statuses by age group and gender. The second part identifies the hybrid components of the SSE including for-profit and not-for-profit entities. The third section uses extensive desk research, including data collection and in-depth interviews with key informants to come up with an overview of the major funding sources of the SSEs in the examined countries and the obstacles they face when accessing credit and tailored financial services. The last chapter analyses the formalisation policies that aim to tackle the informality of the economy.

Overall, the study argues that formalising informality benefits employment by bringing to light activities performed at home or without premises. It provides evidence of the potential of the SSE in enhancing job creation in specific fields and providing citizens with dignified conditions that allow their better performance. In order to untap such potential, this policy study includes extensive recommendations aimed at different stakeholders.