ACKNOWLEDGMENT

Firstly, always and forever I would like to thank my GOD for giving me the courage and
endurance to withstand all the problems and troubles, then words fail to convey my deepest
gratitude to my advisor Yitna Tesfaye(Mrs) for his constructive comments. Also, my
appreciation goes to Hawassa university department of agricultural economics staff members
finally I would like to thank my family for their support and help.

I
 TABLE OF CONTENTS

ACKNOWLEDGMENT…………………………………………………………I

TABLE OF CONTENTS………………………………………………………...II

LIST OF ACRONYMS AND ABBREVIATION……………………………….IV

ABSTRACT……………………………………………………………………….V

1. INTRODUCTION ……………………………………………………………..1

1.1. Background………………………………………………………………...1

1.2. Statement of the problem………………………………………………….2

1.3. Objectives…………………………………………………………………..3

1.3.1. General objectives……………………………………………………..3

1.3.2. Specific objectives……………………………………………………..3

1.4. Significance of the seminar………………………………………………...4

2. LITERATURE REVIEW………………………………………………………5

2.1. Theoretical literature Review………………………………………………6

2.1.1. Definition and concepts of youth unemployment……………………......6

2.1.2. Theories of unemployment…………………………………………........7

2.1.2.1. Classical theory of unemployment…………………………………..7

2.1.2.2. Keynesian theory of unemployment………………………………...7

2.1.2.3. Human capital theory of unemployment…………………………....8

2.1.2.4. The theory of job search…………………………………………….8

2.1.2.5. Job-matching theory of unemployment……………………………..8

2.1.3. Types of unemployment………………………………………………….9

2.1.4. Causes of youth unemployment………………………………………….10

2.2. Empirical literature review…………………………………………………..12

II
3. CONCLUSIONS AND RECOMMENDATIONS…………………………….14

3.1. Conclusions………………………………………………………………….14

3.2. Recommendations…………………………………………………………..15

4. REFERENCES…………………………………………………………………..17

III
LIST OF ACRONYMS AND ABBREVIATIONS
ADLI Agricultural development leads to industrialization

CSA Central Statically Authority

GTZ German Technical Corporation

ILO International labor organization

LFS Labor Force Survey

MOYSC Ministry of Youth Sport and Culture

OECD Organization for economic co-operation and development

IV
ABSTRACT
This seminar paper reviewed the determinants of youth unemployment in Ethiopia. The problem
is so severe among the young people in countries of the world, particularly in the developing
countries. A high level of youth unemployment is one of the critical socio-economic and
demographic problems facing Ethiopia also. The intensity of the problem is high in urban areas
in general and youth face serious difficulty in getting employment. This paper also reviewed
different literature on the definition, concept, and determinants of youth unemployment and
include different theories on youth unemployment, type of unemployment, and causes of
unemployment. Finally, conclude with a recommendation by suggesting that the concerned
bodies should have to try to improve youth unemployment in the country in general.

Keywords: youth, employment, unemployment

V
1. INTRODUCTION

1.1 Background

Unemployment is the most challenging economic problem facing the government. It is a vital
challenge for both the developed and developing world (Kabaklalri et al, 2011). Unemployment
is one of the challenging socio-economic problems that affect all people in the working-age
group in the world. Unemployment is one of the challenges facing today’s world, Coupled with
the population growth and increased poverty, it has a significant impact on growth and
development at large. It causes a waste of economic resources such as a productive labor force
and affects the long-run growth potential of an economy and it gives rise to private and social
problems in the society. The ability of youth to engage in productive activities has both social
and economic consequences for an economy. According to Organization for Economic Co-
operation and Development (OECD. 2010) estimates, there is 85 million unemployed youth
around the world. Unemployment is a condition that is characterized by the incapability of an
individual to find a job of any kind. According to ILO (2012) defines unemployment is the main
challenge of the modern era in both the developed and developing countries, especially youths,
which the United Nations defines as, those between the ages of 15-25, are more affected by
unemployment. Young people are more vulnerable to a lack of experience, social networks, or
other qualifications that would make them difficult to find employment. In most regions youth
were nearly three times more likely to be unemployed than adults (Amanuel D. 2016). Youths
are among the most important resources countries need to have to bring about prosperity.

However, unemployment among young people has become a major challenge for all nations in
the world. It is not only a statistical concept, but also a multidimensional social phenomenon. It
results in substantial crises from psychological, social, and economic perspectives, some of them
are increasing crime rates and violence, dependence on family, low self-esteem, poor social
adaptation, depression, and loss of confidence (Kabaklarli et al., 2011). In the world, there was
an unprecedented increase in youth unemployment between 2008 and 2009. However, from 2009
to 2011 the youth unemployment rate decreased from 12.7 percent to 12.3 percent. By the year
2012, it increased again to 12.4 percent and has continued to rise to 12.6 percent (ILO, 2013).

1
In Sub‐Saharan Africa, the youth unemployment rate is significantly higher than the adult
unemployment rate. It is as twice the adult unemployment rate.

Regarding the determinants and impacts of youth unemployment several studies have been
conducted in different parts of the world by various scholars. Youth unemployment and
underemployment are much more prevalent in urban areas, where women are disproportionately
suffering in the labor markets (Haile, 2012). The seriousness of youth unemployment in Ethiopia
is also profound because, being unemployed and youth can lead to an increase in the risk of
poverty, waste of productive resources, increase income inequality, and social chaos, (Guarcello
and Rosati, 2007). The labor force is growing with an increasing proportion of youth and
employment growth is inadequate to absorb this high proportion of the labor force especially the
youth part in different sectors of the economy in Ethiopia (Alemnew, 2014: cited at Aynalem Sh.
and Mulugeta D. (2018). The country is the highest urban unemployment rate worldwide, with
about 50% of the youth labor force (Berhanu et al., 2005).

Generally, youth unemployment occurs when industries have low performance. It also occurs at
the end of the school year when a larger number of youth graduate and look for work. In addition
to this, youth unemployment results from a general lack of demand for labor. When the business
cycle turns downwards demand for goods and services drops, consequently workers are laid off.

1.2. Statement of the Problem

Unemployment is a serious socio-economic problem facing all age groups of a population.

However, youth unemployment is higher than adults. Moreover, ILO (2010) forecasts a
continued increase in global youth unemployment to an all-time high with a rate of 13.1 percent
in 2010, followed by a moderate decline in 2011. This rate of youth unemployment has been
recognized as one of the most serious barriers to economic and social development in many
developing and developed countries (GTZ, 2010). Analysis of the factors associated with youth
unemployment indicated that the social and demographic characteristics of individuals such as
educational level, work experience, lack of employable skills, sex, migration, attitudes of youth
towards jobs, and family economic status are associated with youth employment.

2
The unemployment situation of youth in Ethiopia is worst, particularly those who reside in urban
areas, (Berhanu et al, 2005). Youth in urban areas face a high rate of unemployment almost 20
percent. They encounter more difficulty in finding wage jobs and employment in the formal
sectors of the economy or engaged in self-employment. Confirming this, the youth
unemployment rate in urban areas of the country was found 24.5percent (CSA, 2010).

Youth in urban areas of the Amhara region had limited access to employment opportunities.
According to CSA (2010) estimate, the rate of youth unemployment in urban areas of the region
was found 18%in 2007. This implies that youth in urban areas of the region were less employed
in the various socioeconomic sectors of the economy. This seminar paper review demographic
and socio-economic determinants of youth unemployment in Ethiopia. Consequently, the results
provide information for designing relevant programs and strategies to reduce the problem of
youth unemployment in Ethiopia.

1.3. Objectives

1.3.1. General objective

The general and main objective of this seminar paper is to review and identify the determinants
of youth unemployment.

1.3.2 Specific objectives

The specific objectives of this seminar are;

• To review the socio-demographic factors that affect the participation of the youth in the
labor force, as well as those which contribute to the high level of unemployment
• To review the type and prevalence of youth unemployment across the regions and
urban/rural districts in Ethiopia.
• To conclude the ongoing experience to make recommendations for programmers geared
toward enhancing employment creation in the country.

3
1.4 Significance of the seminar

The significance of this seminar is to aware more determinants of youth unemployment to

policymakers and other concerned bodies. It will be used to capture concerning information for
NGOs, investors, and other organizations to set up policies and strategies about youth
unemployment. It may also be a source of information or a reference for future research.

To this end this paper may provide the following;-

 Understanding the demographic and socio-economic factors of youth unemployment in

Ethiopia.
 Understanding the type of unemployment that prevails in Ethiopia.
 It may create public awareness about the problem of youth unemployment
 It may help people to take proper care to reduce youth unemployment and its
consequences.
 It may identify provide the gap between different researcher's studies and may give a clue
for further study.

4
2. LITERATURE REVIEW

Unemployment is one of the main problems in the world economy today. Many countries at
different levels of development are trying to cope with this problem. International Labor
Organization (1992) defines unemployment as the situation of being out of work or needing a job
and continuously searching for it in the last four weeks or unemployed ( age 16 or above) but
available to join work in the next two weeks. People who voluntarily do not want to work, full-
time students, retired people, and children are not included in the unemployed category. In short,
unemployment means the state when people are willing and able to do a job but fail to get the
desired job. Youth unemployment is a problem that affects most countries. The ability of youth
to engage in productive activities has both social and economic consequences for an economy.
Youth unemployment is often higher than the unemployment rate for adults highlighting the
concerns that many countries face in facilitating the transition from school to work. The study by
Echebiri (2005), based on youth in Umuahia city in Nigeria, finds that unemployment is
influenced by age, marital status, dependency ratio, education, current income, and employment
preference (paid or self-employment). Studies from Ethiopia indicate that the potential causes of
unemployment in urban Ethiopia include an increasing number of the youth labor force, the
rising internal migration, literacy rate, poor to modest macroeconomic performance, low level of
job creation, and low level of aggregate demand in the economy (Getinet, 2003; WB, 2007).

Youth unemployment is the outcome of different socio-economic and demographic factors at the
macro and micro levels. The micro-level factors are directly associated with individuals’
demographic and socioeconomic attributes while the macro-level factors are related to the
national issues (Toit, 2003). According to Asalfew (2011), sex, migration, education, social
network, job preferences, and access to business advisory services significantly determine youth
unemployment in Debre Birhan town, Ethiopia. However, household income, father education,
and marital status were insignificant. Tegegne (2011) examined the association between socio-
demographic variables and unemployment in Addis Ababa. The econometric analysis has
confirmed that sex and age are statistically significant and have a negative relationship.
Regarding migration status, despite the type of job, a migrant is more likely to be employed than
a non-migrant. Dejene et al., (2016) conducted binary logistic regression to assess the
determinants of youth unemployment in Ambo, Ethiopia.

5
Their result indicated that among the demographic variables, the age of the respondents and
migration status was significantly related to youth unemployment whereas the marital status of
the respondents was not significant.

2.1. Theoretical Review

Different Economists proposed several theories of youth unemployment over different periods.
Therefore, this section reveals definitions and concepts of youth unemployment and some of the
very prominent theoretical literature on youth unemployment.

2.1.1. Definition and concepts of youth unemployment

Youth: the Ethiopian youth policy is defined as that part of the society who is between (15 – 29)
years of age. There is no universally accepted definition for youth. Depending on the level of
their socioeconomic status, countries develop their age group to be referred to as “youth”. As a
result, no single definition exists for the word “youth”. Some countries regard youth as young
persons whose age bracket ranges between the end of childhood and the beginning of adulthood.
Some other countries consider “youth” as young persons who start to engage themselves in
activities that are considered by the community to be expressions of adulthood. Others define
youth as biological growth assuming physical developments as well as psychological changes.
For research purposes and policy suitability, the one with age boundaries is favored (MYSC,
2004).
Unemployment: described as those people without work but looking for work or Available and
ready to work during a reference period, (ILO, 2007). Unemployment has been defined in
different ways. As cited by Mafiri (2002), Human Science Research Council (1985) found that
most definitions of unemployment require that a person not only wants but also looks for
actively. This ignores the discouraged work-seekers who may want to work at the going wage,
but has given up looking because he perceives the chance of getting it to be very slim.

This type of unemployment is sometimes known as hidden unemployment. Although no market

signals are generated by those in hidden unemployment, it is not conceptually different from
open unemployment (Mafiri, 2002).

Youth Unemployment: refers to the share of the labor force aged 15-29 without work but
available for and seeking employment.

6
Employment: includes those persons who were engaged in productive activity during the
reference period as paid or self-employed, (ILO, 2007).

2.1.2. Theories of Unemployment

2.1.2.1. Classical Theory of Unemployment

The Classical Theory of Unemployment has nothing to do with the classical view of employment
that was turned up by the most relevant economists in the 18th century like Adam Smith or
David Ricardo. They advocated for a full-employment labor market. The classical view of
unemployment states that the economy will achieve full employment if wages and prices are
flexible. This view attests that unemployment occurs when wage rises too high to maintain
equilibrium. When wages go up, firms cannot afford to pay as many workers, so some may be
laid off or fired; which increases unemployment. When this happens, fewer people have money
to buy things so demand goes down and prices tend to be down. Because unemployment is high,
more people are looking for work, giving firms more choice in whom they hire and for how
much. These results decrease wages.

2.1.2.2. Keynesian Theory of Unemployment

Keynesian unemployment also known as deficient-demand unemployment occurs when there is

not enough aggregate demand, in the economy to provide jobs for everyone who wants to work.
Demand for most goods and services falls, less production is needed and consequently, fewer
workers are needed. Wages are sticky and do not fall to meet the equilibrium level and mass
unemployment results. Keynesian economists see the lack of demand for jobs as potentially
resolvable by governmental intervention.

One suggested intervention involves deficit spending to boost employment and demand. Another
intervention involves an expansionary monetary policy that increases the demand for money
which should reduce interest rates which should lead to an increase in non-governmental
spending. Keynesians recognized some unemployment from one job to another
(Schervish,1983). Keynes(1936)Formulated his history of involuntary unemployment in which
workers are the ability to locate jobs even when offered to work at the labor lags because the
demand for goods and services land behind the capacity of the economy to produce them.
Keynes argues that The General Theory is necessary to explain how unemployment can arise
from a lack of aggregate demand.

7
2.1.2.3. Human Capital Theory of Unemployment

Human capital is the most important determinant of economic structure. There are some
determinants of human capital like education, health, expected life, and population. Education is
the key factor to promote the efficiency and capability of the human population. Education is one
of the main determinants of the youth unemployment rate. Educated workers are more efficient
than uneducated people in seeking new jobs and gaining more wages. Hence, one should be able
to estimate the rate return on such investment in a way similar to investment in physical capital.
According to this theory, education is the most important asset for economic development and
creating productive jobs. Schultz (1961) noted that education plays a great and significant role in
the economy of a nation as cited by Asalefew (2011).

2.1.2.4. The theory of job search

Stephen and Jackman formulated the theory of job search. For Stephen and Jackman (2012), a
typical unemployed person looking for work is expected to pass three stages. At stage one;
he/she collects information about job vacancies. Vacancies come with different pre-assigned
wages and conditions. In stage two, he/she decides to apply for the vacancies that he/she learns
of. The decision to apply for it depends on the expected value of getting a job or not. Lastly,
he/she accepts the offer of any job for which he/she applied in getting it. The success of an
individual’s application depends on his/her characteristics. Unemployment applies to all persons
without work and actively looking for work. Points out that the unemployment rate in an
economy is the number of people unemployed expressed as a percentage of the total labor force.
The total labor force is defined as the number of people employed plus the number of people
unemployed. Bruno Vander Linden (2011) noted that job seekers have perfect information about
the different wages offered for the different jobs before they decide where to look for work and
in random job searches, no information about the idiosyncratic features of the job vacancies. This
implies job seekers have to invest time and money in applying for jobs and meet all vacancies
randomly.

Hence, they conclude that job seekers should invest time, and money and should have got
sufficient information and in addition to these, they should be decision-makers to obtain
employment.

2.1.2.5. Job-Matching Theory of unemployment

The job matching theory originally proposed by Jovanovich (1979) as cited by (Asalefew, 2011)
quickly became the benchmark model of worker turnover in labor economics, and the inspiration
for a vast body of applied microeconomic research. The worker-firm match is modeled as an
experience good, whose characteristics are initially uncertain, and are gradually revealed over
time by output performance. Optimal inference and the resulting selection of matches provide a
natural explanation for a wide range of robust empirical correlations. According to Jovanovich
(1979), the most skilled workers should occupy the most skilled positions.

8
He also states that workers prefer the opportunity to utilize all of their skills, increasing their
feelings of usefulness, which allows them to command higher salaries. Employers prefer
individuals who are optimally utilizing their skill sets will maximize productivity for their firm
and will stay longer at the firm. The concept of Job-matching depends on the labor market and
the idea contains different multidisciplinary professional skills with respective experience levels.

2.1.3. Types of unemployment

There are four primary categories of unemployment that are typically was discuss. They are
seasonal, structural, frictional, and cyclical unemployment (ILO, 2007).

1. Seasonal Unemployment: It is a condition for People who are out of work and looking for a
job during the off-season. Examples include ice-cream vendors during the winter, schoolteachers
during the summer (they are considered unemployed only if they are looking for a job during this
time), and ski-lift operators during the summer.

2. Structural Unemployment: Structural Unemployment, one type of unemployment, is

associated with the mismatch of jobs and workers due to the lack of skills or simply the wrong
area desired for work. Structural unemployment depends on the social needs of the economy and
dynamic changes in the economy software. Workers who find themselves in this situation find
that they need to acquire new skills to obtain a new job.

3. Frictional Unemployment: Frictional Unemployment is always present in the economy,

resulting from temporary transitions made by workers and employers or from workers and
employers having inconsistent or incomplete information. This type of unemployment is closely
related to structural unemployment due to its dependence on the dynamics of the economy. It is
caused because unemployed workers may not always take the first job offer they receive because
of the wages and necessary skills.

This type of unemployment is also caused by failing firms, poor job performance, or obsolete
skills. This may also be caused by workers who will quit their jobs to move to different parts of
the country. Frictional unemployment can be seen as a transaction cost of trying to find a new
job; it is the result of imperfect information on available jobs. For instance, a case of frictional
unemployment would be a college student quitting their fast-food restaurant job to get ready to
find a job in their field after graduation. Unlike structural unemployment, this process would not
belong due to the skills the college graduate has to offer a potential firm.

9
4. Cyclical Unemployment: Unemployment that is attributed to economic contraction is called
cyclical unemployment. The economy can create jobs that increase economic growth. Therefore,
an expanding economy typically has lower levels of unemployment.

On the other hand, according to cyclical unemployment, an economy that is in a recession faces
higher levels of unemployment. When this happens there are more unemployed workers than job
openings due to the breakdown of the economy. This type of unemployment is heavily
concentrated on the activity in the economy. To understand this better take a look at our Business
Cycles section. For instance, advances in technology and changes in market conditions often turn
many skills obsolete; this typically increases the unemployment rate. For example, laborers who
worked in cotton fields found their jobs obsolete with Eli Whitney's patenting of the cotton gin.
Similarly, with the rise of computers, many jobs in manual bookkeeping have been replaced by
highly efficient.

2.1.4. Causes of Youth Unemployment

Youth unemployment is the result of different factors. Some of them are:-

1. Rural-Urban Migration

Most youths move to urban areas in search of work but they are unable to find jobs due to a lack
of skills and work experience. Hence migration of youth people from rural to urban becomes
jobless due to the unavailability of jobs in urban areas.

2. Sex

Sex is one of the demographic variables that affect youth unemployment. According to Halleröd
and Weisberg (2006), sex reveals substantial differences between females and males concerning
employment opportunities. Females are more exposed to unemployment than males.

3. Household Income

One of the socioeconomic factors that affect youth unemployment is household income. Bacha
(2014) indicated that household income is one of the socio-economic factors that contribute to
youth unemployment and has been related to the family's economic background und. Bach noted
that unemployment rates among young people decrease as household income increases. Youths
having a low-income family have likely been unemployed than adults having the same income
status family ILO (2010).

10
4. Education

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 country’s
labor 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 less-
educated counterparts(Guarcello et al, 2006). Education is one of the factors that determine
youth unemployment.

In line with this, Salvador and Killinger (2008), WB (2009), and Morris (2006) noted that the
unemployment rate of less-educated youth tends to be higher than the unemployment rate of
more educated youth in developing countries because their skills and competencies may not
correspond to the demand of the labor market.

5. Corruption

Corruption is one of the problems which exist in both developed and developing countries but, is
more challenging in developing countries. The development of corruption practices tends to
increase the unemployment rate among youth and educated job seekers which in turn contributes
to sustaining those unlawful practices by forcing the latter to bribe rent-seeking government
officials to secure a job.

6. Social Networks

Social networks are very important capital for finding employment. Asalefew (2011) cited that
youths who do not utilize personal networks could miss job opportunities available. Toit (2003)
also noted that a lack of labor market information and access to the main information networks in
the labor market decreases the chance of getting employment. Generally, social networks and
unemployment have negatively related. This means youths who have a higher social
relationships, have a better chance of getting employment

7. Investment

Investment is one of the most important factors of economic growth and means of getting
employment in both developed and developing countries. Foreign direct investment enhances
private investments, encourages the creation of new jobs, transfers knowledge and technological
skills in the labor force, and generally boosts economic growth in most countries. More
investment fosters youths getting employment or decreases youth unemployment. If the society
has economic contact with other societies, the effects of domestic investments on domestic
unemployment are less sure. But also in this case a large investment will likely reduce the
domestic unemployment while it is being made.

11
2.2. Empirical Literatures Review
Unemployment is one of the most serious problems facing the African continent. By IMF/World
Bank conditions, most of the African countries applying structural adjustment measures have
retrenched a large number of public-sector workers. Three
empirical studies investigated the determinants of unemployment duration in urban Ethiopia:
Serneels (2004), Seife (2004), Mesfin (2012). The first of the two studies used the same data
source and the same methodology. Not surprisingly, the results of the study are quite similar. The
authors found that education has powerful effects on labor force participation as other literature
suggests. Seife (2004) investigated unemployment duration in developing countries in the
context of urban Ethiopia.

The author's econometric evidence shows that the hazard rate of employment is significantly
affected by age, marital status, the highest level of education attained, location, and support
mechanism,(Serneels, 2007) investigated the nature of unemployment among young men in
urban Ethiopia and found that it is concentrated among relatively well-educated first-time job
seekers who aspire to a public sector job and spend on average close to four years in
unemployment. In most countries, the unemployment ratio is higher for women than for men.
The unemployment rate of females and males in South Africa was 15 and 8.1percent
respectively. Similarly, the unemployment rate of females and males in sub-Saharan Africa in
2008 was 8.2 and7.2 percent respectively (ILO, 2009). So, this rate indicates that unemployment
is more of a problem for females than males in Africa.

Ethiopia is a poor agrarian country with a per capita income of (World Bank, 2012). Recently;
however, the country has been achieving promising economic growth. Ethiopian economy is
predominantly agricultural and its economic policy is Agricultural Development Led Industrial
(ADLI) strategy. About 50percent of the economy, 90 percent of export earnings, and 70 percent
of the country's raw materials in the economy emanated from this sector of the economy. Also,
this sector accounts for about 80 percent of Employment opportunities. As part of Africa, a high
level of unemployment and underemployment is one of the critical socio-economic problems
facing Ethiopia. Ethiopia’s population is predominantly young with about 45% of the population
being below 15 years of age.

12
The proportion of the working-age population (15-64 years) will be estimated at 52% (CSA,
2007). Female unemployment is a key indicator of the extent to which females lack labor market
opportunities to generate income (UNDP, 2010). The urban women's unemployment rate
was43.7 percent compared to 29.4 percent for urban male unemployment (Berhanu et al., 2005).
According to the Ethiopian labor force survey report, the unemployment rate of females and
males at the country level was 12.5 percent and4.3 percent respectively (LFS, 2005). Similarly,
the 2005 Ethiopian LFS reveals that the unemployment rate of females and males was 7.8 and
2.5 percent respectively.

13
3. CONCLUSIONS AND RECOMMENDATIONS
3.1. Conclusions
Unemployment is one of the challenging socio-economic problems that affect all people in the
working-age group. The problem is so severe among the young people in countries of the world,
particularly in the developing countries. The issue of youth unemployment is the outcome of
different socio-economic and demographic factors. This is designed to examine determinants of
youth unemployment in Ethiopia. Based on different studies, females are more unemployed as
compared to males and also migrants are not employed in various socioeconomic sectors. On the
other hand, the socio-economic characteristics of the youth also contribute to unemployment.
The probability of unemployment increases as the individual has less access to the social
networks. Most the youth who have more access to the social networks are most of the times
getting a job than those who have less access. Those individuals who get married are employed
and do not get married are unemployed.

The availability of inadequate business advisory services to young people significantly

influences the employment status of youth. Based on the findings, it is possible to conclude that
the relative risk of unemployment is higher for youth who have no access to the service means
that advisor service and unemployment have negative relation. Besides, preferring jobs in the
formal sector also affects the employment status of youth. Thus, youth who prefer paid
employment in the formal sectors have a higher likelihood of unemployment. In addition to this,
the economic status of the family also affects the employment status of the youth. Based on the
above results youth whose family not have better incomes were unemployed.
Generally, demographic factors coupled with socio-economic attributes reduce the chance of
employment opportunities for the young people. As a result, individuals, families, societies in
particular, and the country in general, are expected to pay the social and economic costs of youth
unemployment.

14
3.2. Recommendation
Based on the literature of the seminar, the following points are recommended to reduce youth
unemployment.

 It is revealed that youth who has no work experience were more unemployed. Thus,
intervention is required to include more jobs for newly graduated youths by hiring
institutions such as private organizations, government offices, and NGOs.
Furthermore, the study recommends that the concerned bodies should try to improve the
living condition and employment opportunities for rural youths to reduce rural-urban
migration since migrants are more likely to be unemployed in the urban area and in
general, can be a source for urban unemployment to rise. Finally, efforts should be made
to increase the availability of initial working capital, the identification of profitable
business areas, and the provision of practical training for urban youths to be engaged in
their own business.

 Improving the accessibility and quality of business advisory services; the achievement of
getting productive work is also the function of quality business advisory services. Thus,
improving the quality and accessibility of the service is essential to employment. One of
the ways of improving the accessibility of the services is encouraging NGOs and other
private institutions to participate in making the service available at a lower administrative
levels; capacitating the existing service provider institutions through trained manpower,
finance, and materials.

 Improving the awareness of youth towards jobs; Preferring jobs only in the formal sectors
particularly jobs in government offices increases the likelihood of being unemployed then
the government should try to improve the attitude of youth towards jobs by creating
awareness and by giving credit access to start a business by them and should generate
employment opportunities for the employees as well.

15
 Addressing the problem of migrants; is the main mechanism to reduce youth
unemployment. As shown in the literature migrants are the victims of unemployment in
the town. Though identifying the pushing factors of migrants such as; flood, famine, lack
of credit, and social and economic costs.

 Social networks are important to find jobs in urban areas. Having higher access to social
networks increases the chance of getting new information about job opportunities
available in the residential areas as well as outside the area. To increase the social
networks; educating youth to bring change in their social communication habits using
public and private media, encourage them to use and access the internet, and mobile
telephone; participate in youth-related activities, visit and ask private employment
agencies, friends, and relatives.

16
Reference
Agresti A. (2002). Categorical Data Analysis, Wiley Inter Science, New York.

Alemnew Getnet (2014). Socio-economic & Demographic Determinants of Graduate youths’

unemployment: In the case of Debre Markos town, Amhara Regional State, University of
Gonder.

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