Youth Employment and Inclusive Growth in Tunisia

Executive summary

Tunisia's youth labor market faces profound structural challenges, with youth unemployment reaching 40% among those aged 15–24 in 2024, female labor force participation at just 30.7%, widespread informality affecting 44% of private sector workers, and persistent regional disparities between interior and coastal areas. The Danish Refugee Council (DRC), under the Danish Arab Partnership Programme (DAPP), commissioned this Labour Market Assessment to diagnose employment opportunities across key economic sectors and inform the Youth Inclusion and Employment Project (YIEP). Funded by the Danish Ministry of Foreign affairs, the project targets the improved employability of 24,000 young Tunisians across 12 governorates, with at least 50% women and 30% of jobs classified as Green Jobs.

Applying a Market System Development (MSD) approach, the assessment draws on primary data collected between mid-May and end of June 2025 from 54 firms across five priority sectors - agribusiness, manufacturing industry (including MEEIs and textiles), tourism, ICT, and the tech startup ecosystem - selected through a Relevance, Opportunity, and Feasibility framework. Key cross-cutting constraints include skills mismatches, limited SME access to finance, regulatory tensions introduced by the 2025 Labour Code reform, and geographic concentration of economic activity in coastal regions.

The report proposes targeted market system interventions in each priority sector: promoting AgriTech, organic certification, and first-transformation industries in agribusiness; scaling AI training and domestic ICT demand through a national freelance platform; providing outcome-based grants and technical assistance to manufacturing SMEs; and strengthening the tourism and tech startup ecosystems through targeted capacity building and enabling environment support. Together, these interventions aim to generate systemic and lasting improvements in youth employment outcomes, with particular attention to young women and youth from interior regions.