Empirical analysis of urban youth unemployment in Ethiopia

Lack of adequate jobs and long unemployment duration becomes a challenge for urban youth in Ethiopia. This study empirically examines youth unemployment and its determinants in urban Ethiopia. It aims to examine the incidences and durations of youth unemployment and their determinant factors. In addition to logistic regression model, a nonparametric Kaplan–Meier survival analysis and Cox proportional hazards model are used. The results indicate that both the incidence and duration of youth unemployment is higher in urban Ethiopia. The hazards model shows that the hazard rate of leaving unemployment are significantly related to individual characteristics such as age and educational level of the youth, and labor market factors such as experience and job market information. Gender and regional disparities are observed. Young women exit unemployment much slower than men and the exit rate increases with age. Big and relatively more urbanized regions have a higher incidence and longer duration of unemployment spells than the small regions. Finally, based on the results, the study suggests that there is a need to adopt target policies that will promote skills and employment opportunities for the youth. Providing entrepreneurship training and startup capital to encourage youth to create rather than seek jobs is critical in this regard.