International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

ISSN: 2319-4421

Unemployment in Ethiopia: A Call for an Action

Bimal Kanta Nayak, Associate professor, Department of Social Work, VISWASS, India

ABSTRACT:
BACKGROUND: One of the major problems of youth is
unemployment, affecting youth from all walks of life in this
modern era. Unemployment (mainly as an urban
phenomenon) and underemployment continue to be
serious social problems in Ethiopia despite some
improvements in recent years. With around 50 per cent of
the urban men between age 15 and 30 unemployed,
Ethiopia has one of the highest unemployment rates
worldwide .Clearly some young people are more
vulnerable than others, but in many ways a period of
unemployment has become a normal part of the transition
from school to work. While youth unemployment has been
well researched, the majority of studies have focused on
those living in urban areas. This paper describes the
nature of unemployment among young men in urban
Ethiopia. AIMS: To determine the causes of unemployment,
affecting Socio-economic of condition of youth in Gondar
town, a case of Azezo Demaza Kebele (Block) in Ethiopia.
METHOD: the primary data was collected from unemployed
youth in Gondar town, a case of Azezo Demaza Kebele

(Block) in Ethiopia. Random sampling techniques were

employed in the study for data collection. The sample
constitutes 50 individuals from that locality. RESULTS:
The study reveals that the majority of youth (82 percent)
search for job from 1 to 4 years..During the long period of
searching of job, unemployment increase the related
problem also extended. According to the assessed data 78
per cent of the total respondents pass their time by
chewing chat smoking cigarette, drinking alcoholic
beverages and other related activities.69.23 percent of
respondents are users of drugs on result of unemployment.
The Labor market institutions that govern employment
relations in Ethiopia are generally found to be weak. This
weakness is characterized by limitation of legal framework
and lack of social dialogue among institutions.
CONCLUSIONS: Despite the recent encourage economic
growth in Ethiopia, unemployment is high and remains to
be one of the socio economic problems in the country. In
Ethiopia, there have been significant increases in
educational attainment; however, there has not been as
much job creation to provide employment opportunities to
the newly educated job seekers. There is a need to
improve labor productivity of the employees in the sector
by aligning formal education programs to the practical
skill needs of the country.

INTRODUCTION:
Youth unemployment is a new concept of global
problems, threatening whole humanity including educated

and illiterate mass especially youth to cope up the

magnitude of the problem in their respective locality. It is
a serious concerns every nation including eastern and
western countries. Developing countries are more
victimized than others and Ethiopia has its own long
history of unemployment than any other countries.
Ethiopia is a poor agrarian country with per capita income
of USD 350 (World Bank, 2011). Recently, however, the
country has been achieving a promising economic growth.
According to The Economist (January 6, 2011), the
country had the 5th fastest growing economy in the world
during the periods 2001-2010 at an average annual GDP
growth rate of 8.4% and the 3rd with a forecast of 8.1%
during the periods 2011-2015. Despite such
improvements, unemployment is high and is one of the
socio economic problems in the country. This shows that
the economy cannot provide adequate jobs to the growing
population in both rural and urban areas. There are few
studies that address the employment challenges in
Ethiopia. Most of the studies give a narrow view of the
labor market few studies tend to concentrate on the
incidence of unemployment in specific categories, such as
urban youth unemployment (Serneels, 2004; WB, 2007).
The policy aspect of labor market is found to be less
explored in the literature at least in the context of Ethiopia.
Youth make up a major proportion of the population,
especially in developing countries. There are 1.2 billion
youth between the ages of 15 and 24 years 18% of the
worlds population. the vast majority (about 87%) of
these young people live in developing countries. In Africa
alone, there are some 200 million youth, comprising more
than 20% of the population. (United Nations (2007) as cited in
World Bank, 2009). Ethiopia has the largest youth
population in Sub-Saharan Africa. More than half of its
population is under the age of 25, and 20% are between 15
and 24. Furthermore, this proportion is steadily increasing,
having grown from 14% in 1984 to about 20% in 2005.(
CSA as cited in Guarcello et al, 2007).
The Nature of Youth Unemployment: An Overview
Youth unemployment is a critical socio-economic issue.
According to the ILO, more than one-third of the worlds
youth are currently either seeking but unable to find work,
have given up on the job search entirely, or are working
but still living below the $2 a day poverty line. Prolonged
unemployment of youth can impair their future
employability chances and their access to quality jobs.

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International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

Moreover, it can result in loss of skills and self confidence

for the youth.
Youth unemployment is especially significant in urban
areas. In Ethiopia, the unemployment rate for urban youth
is 37.5% as opposed to 7.2% for rural youth.( Caveat:
rural youth face high levels of underemployment). Among
the many contributing factors, most notable are the low
absorption capacity of the formal sector, the low rate of
employment creation, and the skills shortage as well as the
lack of entrepreneurship of the youth.
1. Causes of Unemployment in Ethiopia
A high level of unemployment indicates the failure of a
countrys economy to use its labour resources effectively.
And there can be various factors explaining
unemployment, such as a low level of general economic
activity, recession, inflation, rapid changes in technology,
disability, willingness to work and discrimination. In the
case of Ethiopia, several factors contribute to the causes of
youth unemployment:
Poor economic performance. This is a major problem
for most developing countries such as Ethiopia. Low
economic growth, which is manifested in low economic
activity and low investment, entails low overall job
creation (Brunero, 2008). This makes it especially difficult
for youth since, even in an economic upturn, youth are at a
disadvantage as they lack work experience.
Low level of education. In Ethiopia, a large number of
individuals enter the labour market below the age of 15
with little or no formal education (Guarcello et al, 2006).
Illiteracy is a major factor contributing to
underemployment and employment in the informal sector.
Education is a means for enhancing the productivity and
employability of a countrys labour force as it has a
positive influence on occupational type: more-educated
workers are much more likely to be in wage employment
and much less likely to be in unpaid work than their lesseducated counterparts (Guarcello et al, 2006 ).
High population growth. The increasing rate of
population growth is another factor affecting scarcity of
job opportunities. The size of the labour force has been
increasing at an average annual rate of 3.2%, reaching an
estimated 32.2 million people in 2005 (Denu et al, 2007).
The demand for labour has a slower growth rate than the
growing population.
Lack of entrepreneurship. Ethiopias labour market is
comprised of a large informal economy and this informal
sector is predominantly an employment of last resort
rather than a preference by entrepreneurs (World Bank,
2007).According to UN Habitat (2003), most people are
motivated to start their own businesses and create their
own employment because the chances of finding jobs in
the current labour market are so limited. However, starting

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a small business without the capacity to sustain it or cope

with other related challenges is not a viable solution to the
problem of unemployment.
Skills mismatch. Mismatch of education and training
skills with the requirements of the labour market is another
important reason for the high level of unemployment.
According to Denu et al (2005), a study of unemployment
in urban areas revealed an increase in unemployment rates
of young people who have attained high school or a higher
educational level. This could be due to a mismatch
between the type of education provided at schools and the
requirements of the labour market.
2. Low level of education and lack of quality skill
attributes
On the supply side of the Ethiopian labour market, there is
a low quality labour force. There are various reasons
explaining the fact that most of the labour force has low
educational levels and lack quality skills.
a. Low early human capital development. Owing to the
general poverty level in the economy, youth leave school
and enter the labour market too early, without having the
necessary human capital to succeed. Some Findings from
the survey implied that youth that leave school at an early
age usually stays being employed in the informal sector
without further improvement
in their human capital.
b. Low quality of training. Participating in vocational
training increases the probability of being employed
(Serneels, 2007); however the quality of training and its
impact on the trainees in actually equipping them with the
necessary skills is low. From the survey, both the private
sector and some training institutions emphasized and
agreed on the low quality of the training that is being
provided. The youth FGD also showed that graduates
capacity and confidence is very low because of low quality
education and training, which can be attributed to training
large numbers of trainees at the same time, using out-ofdate equipment, and the low capacity of trainers.
c. Lack of entrepreneurial confidence and motivation.
Being equipped with the necessary skills is important, not
only to get employed in a well paying job but also for
starting ones own business. The lack of entrepreneurial
motivation, lack of vision/ innovation and inability to
produce good business plans or feasibility studies are all
part of the problem youth are facing in starting their own
businesses. From the youth FGD, graduates of TVET
(Ethiopian Television) institutions admitted that they lack
confidence to start their own businesses. A necessary
motivation needed for entrepreneurship is missing, greatly
contributing to the unemployment problem. Furthermore,
youth cooperatives who are given financial and other
support by MFIs and ReMSEDAs respectively are highly

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International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

dependent on the government for finding markets and fail

to perform once they finish their awarded projects.
d. Absence of career advice. According to most TVET
institutions interviewed, youth who are lucky enough to
get formal education choose their field of studies naively,
without considering their capacity and interest. Moreover,
they are not given the necessary orientation about their
future prospects, often leading them to choose a field of
study that has an excess supply. There is a lack of support
for university graduates in securing jobs. According to
interviews conducted with BoLSAs, it was noted that the
bureaus are not fully implementing their roles in linking
graduates with prospective employers.
3. Youth perceptions of employment:
Youth, most of the time, prefer to be employed in the
formal sector rather than engage in self- employment.
According to Serneels (2007), public sector and formal
private sector employment are considered good jobs due
to their high wages, while self-employment, casual and
cooperative employment are considered to be bad jobs.
a. Youth aspire to get white collar jobs (hence do not
value blue collar jobs). Owing to the wage variation,
the middle class prefers to get education and queue in
unemployment for a good job while foregoing selfemployed earnings. Unfortunately, most of those aspiring
to formal sector jobs never get one because of the sectors
small share in the labour ma
b. Low initiative to start ones own business and to stay
in work. According to training institutions interviewed,
graduate expectations of a smooth and rapid transition
from school to work, attitude towards work and low level
of initiative keep youth away from being proactive in
starting their own businesses (Government offices, MFIs
and youth). With regards to working in a group, most of
the key informants in the survey mentioned that youth,
most of the time, are not willing to work in groups which
makes it difficult to get support in terms of loans and
working premises since these supports are mostly given
only for those organized in groups. Leadership problems
and disagreements were also mentioned as major problems
when working in a group/team. Willingness to work was
another factor raised in the survey; the youth FGD raised
the issue of cases where youth groups disappeared with
advance payments without even starting work or without
showing endeavour.
c. Low awareness levels amongst youth. According to
the youth FGD, some youth lack awareness about the
current labour market and what they want to do in the
future. Most youth when asked what would you do if you
had this amount of money or ...when you finish school,
gave replies such as, What is there to do with only 50,000
birr?, I dont know and I will thinks about it when I

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reach there. Concerned stakeholders should work

towards raising youths awareness of entrepreneurship and
making them actively engaged in economic activities.
4. Lack of experience
a. The unemployment problem is higher for those with
no experience. According to CSA (2005), 48% of the
unemployed labour force in urban areas has never worked.
b. Youth job seekers lack experience. From the supply
side, youth job seekers being new to the work
environment lack the experience demanded by
employers. Limited formal work experience and a lack of
job-related skills put youth at the bottom of the hiring list.
c. Most youth FGD participants stressed the work
experience requirement of most employers as the most
critical problem that youth face. In the case of professional
jobs, most fresh graduates remain unemployed for more
than a year since most vacancies require work experience.
The problem of youth unemployment is gaining attention
in Ethiopia as the country is home to one of the largest
youth populations in Sub-Saharan Africa, where most
young people enter the labour market with low levels of
human capital (Guarcello et al: 2008). To this effect, the
GoE, has outlined in its main development strategy,
PASDEP, a major emphasis on youth policy and strategy.
The policies and strategies have been enshrined in various
Government documents outlining the main directions to be
followed in response to the issue.

OBJECTIVES OF THE STUDY:

1. To assess the effect of unemployment problem on
economic issues
2. To assess the effect of unemployment on social issue
3. To show the effect of unemployment in youths
4. To describe the socio-economic effect on current
situation

METHODOLOGY:
Area of the study:
The present study was conducted at Gondar city, an old
imperial capital of Ethiopia on socio-economic effects of
unemployment. It is was former historical capital city of
Ethiopia is located in the North West Ethiopia about 747
km for from Addis Ababa .It is located in the Semien
Gondar Zone of the Amhara Region. The town of Gondar
is divided into 21 kebeles. The particular study site is the
town of Gondar. According to information from the city
municipality, the inhabitants of the town are
predominantly from the Amhara ethnic group, with some
Tigre. It has a total population of more than 200,000 and is
a center of business and tourism.

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International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

Significance of the study: The researcher expected to

give current and timely information about the
consequences of youth unemployment in the area of
Gondar town. The study incorporates large data sets and
relevant variables on the consequences of unemployment.
This may make some contribution for policy makers and
interested researchers by providing information
concerning the consequences of youth unemployment.
Study Population

The populations for this study include an unemployed

educated youth in Gondar town and near places like Azezo
Demaza (Block).Random sampling techniques was
employed in the study to collect the sample constitute 50
individuals.
Field work and Data collection: The field work was
carried out in the month of June 2013 for 8 days covering
whole
Gondar
town
and
nearby
places
(blocks).Questionnaire was prepared for those educated
respondents and other respondents were interviewed by
investigators various documentary sources and materials
like annual reports, periodicals and written records were

Sl.N0
Place of birth
1
Gondar
2
Out Gondar
Total

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used to check the validity and reliability of the primary

data obtained from.
Data analysis and interpretation: The data have been
collected and by employing the interview guide from
different sources. The data pertaining to the subject matter
was collected from a face to face interview from concern
people..Analysis and interpretation of the data were based
on the response obtained from the respondents and the
data obtained from the documents of government
department.
The interview schedule was administered to summarize
youth unemployment on socioeconomic, educational and
psychological factors leading to the consequences of
unemployment problem faced by educated youth in their
day to day life.
Characteristics of responses:
Description of the characteristics of the target population
gives some basic information about the sample population
involved in the study, thus the following tables, contains
about the general, educational, economic status and
attitude of educated youth on unemployment in the study.

Table 2: Distribution of respondents by place of birth

N0.of Respondents
Total
Male
Female
16
22
38
4
8
12
20
30
50

The above table reveals that the majority of respondents

are from Gondar town which consists of 76 percent, where

Percentage
76
24
100

24 percent of them belong to out of Gondar and come to

town to live in different times from the surrounding wards.

Table 2: Distribution of respondents by age interval, family daily income, sex & Educational status
Sl.No
A
1
2
3
4
5
B
1

C
1
2
3

Age Group
Male
10-19
20-29
30-39
40-49
50-59
Total
Family daily incomes
Below 18 Birr ( local
currency) equal to one US
dollar
Above 18 Birr ( local
currency)
Total
Marital Status
Married
Unmarried
Divorce

4
7
7
1
1
20

3
12
2

Sex
Female
11

Total

Percentage

13
2
3
1
30

15
20
9
4
1
50

30
40
18
8
4
100

14

28

42

84

16

20

30

50

100

6
19
4

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9
31
6

18
62
12

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International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

4
D
1
2
3
4
5
6

Windowed
Total
Educational status
Primary education to 10
grade
Secondary cycle (11-12)
Higher education
Certificate
Diploma
Degree
Total

3
20

1
30

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4
40

8
100

15

23

46

2
2
2
4
1
20

1
9
4
1
1
30

3
11
8
5
2
50

6
22
16
10
4
100

The above table shows that age group 20-29 comprises the
most 40 per cent of respondent followed by 10-19 (30 per
cent) ,thirdly 30-39 which composed 18 per cent ,when we
see the over whole age distribution these three age groups
dominate the respondents that are 70 per cent of the
whole.
According to the above the table it reveals that 84 percent
of respondents family income is below 18 birr per day (18
birr is equal to one US dollar) , where as 16 percent of
them have above 18 birr per day . So it is possible to
conclude that those whose family background is poor are
likely to be exposed to unemployment than their counter
parts. It is clear that unemployment is directly related with
poverty situation of the family.

Regarding the distribution of respondents by marital status

and sex, it indicates that unmarried respondents constitute
the largest share that is 62 per cent here single male
respondents are (24 per cent) less than unmarried female
respondents (38 per cent).It is followed by the married
respondents which make up (18 per cent) and windowed
respondents constitute 6 per cent taken as a respectively.
With regards to the educational status, the table reveals
that 46 per cent of respondents have educational status
from Primary education to 10 grades, where as 4 per cent
of them have degree .And 22 per cent of respondents have
higher education, while 6 per cent of them are from 11-12
standards 16 per cent of them have certificate and 10 per
cent of them possess.

Table -3 distributions of respondents based on the way of seeking jobs, time spent Searching for job and their
health condition
Sl.NO

Way of seeking job

No.of Respondents
Total

A
1
2
3
4
B
1
2
3
C
1
2

Attending public Media

Formation of friend ship and group
Checking worksites
Other
Total
Time spent for searching job
Less than 1 year
1-4n year
Above 5 year
Total
their health condition
Those have health problem
Those have no health problem
Total

According to the above table, most of the respondent (46

percent) replied that from friendship and different groups
to assess any employment opportunity in the town that
means all most half of the total followed by other groups.

Percentage

Male
5
9
4
3
21

Female
1
14
4
10
29

6
23
8
13
50

12
46
16
26
100

5
15
20

2
26
2
30

7
41
2
50

14
82
4
100

8
11
19

18
13
31

26
24
50

52
48
100

And finally those who check working sites and attained

public media is 12 percent and 16 percent respectively.
It is found from the study that most of the respondent is
grouped with in the interval of 1 to 4 year .i.e 82 per cent

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International Journal of Management and Social Sciences Research (IJMSSR)

Volume 3, No. 4, March 2014

of the total respondents. From this it is found that males

and females constitute 30 per cent and 52 per cent
respectively. The last number of respondent are grouped in
the interval that spent above -5 year and above where only
4 per cent of respondents are involved. In this category no
male respondent is included.
According to the assessed dada ( not shown in the table )
78 per cent of our total respondents pass their time by
chewing chat smoking cigarette, drinking alcoholic

Sl.N0
1
2
3

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beverages, and other related activities. The rest 22 per cent

answered no to the question they are asked.
In the table it presents the health related impacts on the
unemployed. The problem is aggravated by an increase in
duration of unemployment, 52 per cent of the total
respondents faced health problem due to unemployment.
The rest group constituted 48 per cent are those who
dont face any health problem.

Table -10 distribution of respondents by their dependent source of income

N0.of Respondents
Source of income
Total
Percentage
Male
Female
Parents
13
18
31
62
Brothers and sisters
2
4
6
12
Other relatives
5
8
13
26
Total
20
30
50
100

The above table indicates that 62 per cent of respondents

have dependent sources of income from parents, where as
12 per cent of them, say that they have source of income
from their Brothers and sisters .and 26 per cent of income
is from other relatives. It shows that majority of they
depend upon their parents for their livelihood.

DISCUSSION:
Ethiopia has one of the highest unemployment rates
worldwide. In this study it is leant that there is a greater
impact of unemployment on the unemployed person. With
regards to the place of origin of respondents that the
majority of them are in habitants of Gondar town itself
which consists of 76 percent, and most of them (40 per
cent) belong to the age group of 20-29.According to the
study it is found that 84 percent of the respondent have
family income below 18 birr per day( 18 birr is equal to
one US dollar) . So it is possible to conclude that those
whose family background is poor are likely to be exposed
to unemployment than their counter parts. It is clear that
unemployment is directly related with poverty situation of
the family. Majority of respondents (62 per cent) remain
unmarried and 46 per cent of respondents have educational
status from Primary education to 10 grades, where as 4 per
cent of them have degree. It indicates that the status of
education is very poor among the respondents. The study
shows 82 percent of respondents search jobs from 1 to 4
years. It is interesting to find in the study that 78 per cent
of total respondents pass their time by chewing chat
smoking cigarette, drinking alcoholic beverages, and other
related activities. The study has investigated that more
than of our respondents 52 per cent) faced health related
problems due to acute unemployment. 74 per cent of the
respondents depends their livelihood on their parents,
brothers and sisters relatives

RECOMMENDATION:
1. It is obvious that the socio economic consequences of
unemployment are not solved in one way. The problem is
multi-dimensional. One the case of low rate of
employment is the mismatch between increasing number
of job seeking people and low number of privates and
public institution its better to minimize the problem by
giving investors to invest high opportunities to facilitation
land occur. Decreasing taxes occurs to finance by
expanding credit etc. the government by itself federal up
to Kebele (block) level.
2. To alleviate social, economic psychological and
political problem, the government create jobs without any
type of corruption, lack of transparency, lack of good
governance .So that government would do various
developmental activities and wonderful jobs for general
public in general and an unemployed youth in particular.
3. Government and non governmental bodies need to
design awareness creation programs about the positive
benefits of work in cooperatives. This will initiate more
unemployed youth to get involved in the job and work
according to the basic principle of cooperative .The
government should extensively organize the unemployed
youth and give them adequate credit service to work
under micro enterprise in a success full manners.
4. Unemployed person need family support and
rehabilitation services to solve their health related
problems and to recover from drug addiction and to
prepare them to work.

CONCLUSION:
Unemployment in Ethiopia is consistent with
unemployment in a segmented labour market. Public
sector and formal private sector employment are
considered good jobs because they pay well, while self

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employment, casual and co-operative employment are bad

jobs because they pay badly. Civil service is the dominant
good job and requires some level of education; self
employment and casual work are the dominant the
dominant bad jobs. The former pays two and a half times
the earnings of the latter. This provides an incentive for
the middle classes to get education and queue in
unemployment for a good job, especially a public sector
job, while foregoing earnings as self-employed. However,
a number of those who aspire to a public sector will never
get one. At the same time, a minority of young men would
like to start their own business but is constrained to do so,
indicating that credit constraints are another cause of
unemployment. We find suggestive evidence that
households reduce their savings and consumption to cope
with unemployment, although further research is needed to
establish this.

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