The Challenge of Unemployment and Youth Unemployment amidst Fast Economic Growth in Ethiopia
Date
2022
Authors
Geda, Alemayehu
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Abstract
Using a varies of approaches, this study examined the challenge of general and youth
unemployment during the fast growth period of Ethiopia, 2000-2021. Apart from
describing the recent profile of the labour market, I found a mismatch between the
sectors that are the sources of fast growth and the sectors with significant potential
for job creation. A simulation exercises carried to examine the employment effect
of demand stimulus is not found to change this pattern although it could lead to an
increase in output. The unemployment problem is accentuated by lack of structural
transformation and low or declining productivity across sectors. The probability
of being unemployed is also found to be relatively higher for females and youth,
compared to males and adults, respectively. Government effort to address the youth
unemployment problem through the establishment of technical and vocational
training schools is not helping either. Based on the findings a number of policy
implications are deriver. Among this, for instance, redirecting incentives and policy
support to sectors with significant employment potential – the top three identified
in the study being agriculture in general and animal husbandry in particular, agro industrial parks and labour-intensive manufacturing - could be important to address
the challenge of unemployment.