Unemployment Experience of Youth in Addis Ababa A Research Paper presented by: Beshir Butta DALE (Ethiopia) in partial fulfillment of the requirements for obtaining the degree of MASTER OF ARTS IN DEVELOPMENT STUDIES Major: Social Policy for Development (SPD) Specialization: Children and Youth Studies Members of the Examining Committee: Dr. Karin Asrid Siegmann (Supervisor) Dr. Roy Huijsmans (Reader) The Hague, The Netherlands December 2014 ii Contents List of Tables vi List of Figures vi Lists of Appendices vi List of Acronyms vii Abstract viii Chapter 1 Introduction 1 1.1 Background of the Study 1 1.2 Indications of Research Problems 2 1.3 Concepts and working Definition of Terms 4 1.3.1 Working Definition of Youth and Youth Concepts 4 1.3.2 Working Definition of Unemployment 4 1.4 Justification of the Study 5 1.5 Objective of the Study and Research Questions 5 1.6 Structure of the Paper 6 Chapter 2 Theories and Concepts 7 2.1 Human Capital Theory and Practice 7 2.2 Youth Transition in the Current Labor Market 8 2.3 Unemployment Concept 9 2.4 Youth Unemployment Theory 10 2.5 Theory of Relative Deprivation 11 2.6 Youth Unemployment Experiences Conceptual Framework 11 Chapter 3 Research Strategies 13 3. Research Methodology 13 3.1 Sampling Techniques 13 3.3 Method of Data Analysis 18 Chapter 4 Youth Unemployment in the Context of Urban Ethiopia 19 4.1 Youth School to Work Transition in Ethiopia Past and Present 19 iii 4.2 Indications of Educated Youth Unemployment Pressure in Ethiopia 19 4.3 Youth unemployment nature, trend and experiences in urban Ethiopia 21 4.4 Youth Population and Employment Statistics in Addis Ababa 23 4.5 General Unemployment versus Youth Unemployment Trend in Addis Ababa 23 4.6 Youth unemployment by gender and age in 23 Addis Ababa 23 4.7 Youth Unemployment Trends by Education attainments in Addis Ababa 24 Chapter 5 Findings and Discussions 25 5.1 Youth Subjective Unemployment Experiences 25 5.1.1 What it means being unemployed for youth? 25 5.1.2 How unemployed youth passes their time? 28 5.2 Education and Youth Unemployment 28 5.3 Normative Transition Effects on Youth Expectations 30 5.4 Youth Perceptions about Employability 31 5.5 Youth Perception about the Causes of Unemployment 32 5.6 What Counts as Employment from Youth Perspective? 33 5.7 Unemployed Youth Job Searching Experiences and Mechanisms 34 5.8 Youth Coping Mechanisms with Unemployment 36 5.8.1 Family Supports during Unemployment 36 5.8.2 Going Back to School 37 5. 8.3 Migration 38 5.8.4 Delaying adulthood‟s responsibilities 39 Chapter 6 Concluding Remarks 41 References 44 Appendices 49 iv Acknowledgments Though this is not my first time to undertake research, the ISS education system and its multi-school thought scholars has shown me other ways of learning. In this challenging but exciting learning process the contributions of many peoples were immense. My sincere utmost gratitude goes to my supervisor Dr. Karin Astrid Siegmann who was abundantly helpful for her unreserved friendly council and professional support and guidance that made this work possible. I would like to express my deepest thankfulness and appreciation to my second reader Dr. Roy Huijsmans for his professional critical comments, excellent guidance and caring as well as providing me relevant material for doing this research. I am also indebted to all respondents that made this study possible in sharing their thoughts and experiences with me. The Dutch Government deserves special appreciation and thankfulness for granting me NUFFIC scholarship opportunity which otherwise my stay in the Netherlands and study in ISS wouldn‟t have been possible. Affections and embracing love of my family was also important. My earnest special thank goes to my wife Alfiya Jewaro and my daughter Honey for their patience of my absence and enduring love which kept me going in this journey. I particularly feel guilty for leaving my wife behind in a period of her maternity when she needs most care as Honey was just barely two months old. Their love is always a source of my inspirations and joy wherever I am. Finally, my deepest thankful goes to my mother for her unwavering love and prayer. Above all, I thank almighty Allah for making everything possible for me. v List of Tables Table3 1 Main characteristics of the respondents 14 List of Figures Figure1.1 Percentage of employed population by sector 1 Figure4.1 Graduated from institutions 2009-2013 20 Figure4.2 Youth unemployment rate in urban Ethiopia 22 Figure4 .3 Trends of general unemployment in Addis 24 Figure4 .4 Trends of youth unemployment in Addis 24 Figure 4. 5 Youth unemployment by age and gender in Addis 23 Figure4 .6 Youth unemployment by education attainments 24 Lists of Appendices Appendix 1: Semi-structured and in-depth interview guidelines 49 Appendix 2: Distribution of Population in Addis Ababa by sub-city 51 Appendix 3 :Youth population and employment Statistics in Addis Ababa) 52 Appendix 4: Youth crowed for Job search at „Arat Kilo‟, Addis Ababa 53 vi List of Acronyms BoFED Bureau of Finance and Economic Development BoLSA Bureaus of Labor and Social Affairs CSA Central Statistical Authority EPRDF Ethiopian People‟s Revolutionary Democratic Front GTP Growth and Transformation Plan ILO International Labor Organization ICLS International Conference of Labor Statisticians IMF International Monitory Fund MoFED Ministry of Finance and Economic Development MoLSA Ministry of Labor and Social Affairs MoYSC Ministry of Youth, Sport and Culture MSE Micro and Small Enterprise OECD Organization for Economic Co-operation and Development PASDEP Plan for Accelerated and Sustained Development to End Poverty TVET Technical and Vocational Education and Training UN United Nations UNESCO United Nations Educational, Scientific and Cultural Organization vii Abstract Ethiopia witnessed progressive achievement in education through the adoption of education for all initiatives. However, in the country youth in general urban youth in particular have experienced the highest rate of unemployment. Due to rise in education attainment among youth and the limited economic opportunities for skilled labor, unemployment is widespread among educated young people. This research paper focus on examining how young people experience unemployment challenge- what it means being unemployed and what mechanisms they adapt to sustain their livelihood and achieve their aspirations. In doing so the study highlights unemployed young people‟s perceptions of the employability and causes of unemployment. Concepts and theories of youth, human capital development, unemployment, relative deprivation theory and youth and transition model were used in analyzing youth unemployment experiences. The study was primarily based on qualitative data from interview and ethnographic observation. Secondary data drawn from secondary sources were also used to analyze the background of urban unemployment in Ethiopia. The study revealed that the way in which young people navigate school to work varied depending on different personal and socioeconomic factors. Youth experience unemployment differently based on their age, gender, marital status, and family background and education levels. Due to limited opportunities, relatively better educated youth has faced challenges of finding work in the formal sector and left with the option either employment in the informal sector or remain dependent on their family. Unemployed youth was not only experienced material deprivation but also affected by social exclusion, and emotional and psychological distresses. Relevance to Development Studies Youth unemployment is a common problem in many countries. It restrains the contribution of the larger segment of the population to the economy, which in turn has social and economic consequences for the country. In a poor economic context where access to education at all levels surpasses employment opportunities, examining the educated youth unemployment experience will have paramount importance to development studies‟ literatures. In this sense the study will contribute to enhance our understanding of what it means being unemployed for educated young people and how young people perceive work and employment and how they negotiate and renegotiate their position in a limited opportunity and changing economic, education and labor market conditions. viii Key Words Young people, unemployment, labor market, educated youth, university graduates, TVET, unemployed youth ix Chapter 1 Introduction 1.1 Background of the Study Like many other African countries in Ethiopia there are some indications of improvement in human development. Through initiatives like „education for all‟, young people and their families have invested their scarce resources on school education (Chuta and Crivello 2012:1). Therefore, access to formal education has been improved. Despites of millions of young people and their families placed their hope on school education the promise to overcome poverty and lead to a better life through formal education are not being achieved for many of young people (Murray 2012:3). Therefore, in a poor economic situation like Ethiopia, where quality of education is low and employment creation is limited, increased access to education creates the problem of educated unemployment (Broussar and Tekeleselassie 2012:21). With the two third of its population are below 25 years, in Ethiopia youth employment is one of the pressing issues that demands development policy concerns (Denu et al 2005:4 ). Though the economy of the country has been somehow growing it is unable to keep the pace with the growth of the population and increased education attainments. Therefore the employment creation has been slow in all employing sectors. This implies that the demand side is the most restraining factor for youth employment in the country. Figure1.1 Percentage of employed population by sector 60 50 1999 eg 40 2005 a t n 30 e 2013 c re 20 p 10 0 M F M F M F M F Agriculture Manufucturing Wholesale and Other Services Retail gendered employmet by sector Source: Computed from CSA 2013 published data 1