ABSTRACT

Now days, the growth of unemployment is one of the critical socio-economic problems facing
Ethiopia. It creates many economic and social problems in the economy. The intensity of the
problem is high in urban areas in general, Adama city in particular where youth face serious
difficulty in getting employment. Despite the severity of urban youth unemployment worsens
overtime in Ethiopia; researches done on the area are scanty. The main objective of this study is
to identify and examine the demographic and socio-economic determinants of urban youth
unemployment in Adama city, East showa Zone of Oromia Region. To achieve the specified
objective, both primary and secondary data sources were used. The primary data was collected
from 480 sample respondents through structured questionnaire from seven kebeles of the city
proportionally. To supplement the primary data, secondary data was also gathered from
published and unpublished sources. To come up with the results the researchers employed both
descriptive and inferential analysis. The study found that 54% of the respondents are unemployed
while 46 % of them are employed. In the case of inferential analysis binary logit model was used.
Hence, Variables such as, marital status, work experience, social network, job preferences,
mothers and fathers education, and family income are identified as negative and significant
determinants of urban youth unemployment in the study area. Whereas gender, education level
and migration status of urban youths affected unemployment positively and significantly. Hence,
efforts should be made to reduce the level of unemployment by increasing job opportunity for
non-educated and non-experienced youths, reducing rural-urban migration and provision of
relevant information like as mass media and magazines in the study area for job seekers.

Key Words: Youth, Employment status and Binary Logit

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 CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
Unemployment is one of the major problems faced by the most of people in the world. Not only
in the present but also in the past, unemployment became the most serious problem. Nowadays
unemployment increased both in underdeveloped and developed countries due to the increase in
population. Unemployment has a serious effect not only on the living standards of the people
(negative effects on the psychology, socio-economic and physical well-being) but also on the
socio-economic status of a nation (Fitsum, 2014).
Unemployment has resulted not only in economic instability but also triggers social problems.
Some of the reasons for economic instability as presented by Kyei and Gyeke (2011) are that it
leads for crime, the erosion of human capital, misery and social unrest. In addition, Bakare
(2011) also added that unemployment results in psychological problems such as hopelessness,
frustration, hostility and gradual drift of unemployed youth into all manner of criminal behavior.
According to Shahid et al (2013)in the long-term unemployment always results in creating
financial hardships, poverty, homelessness, crime, frustration and many other problems like
family tension and breakdown, social isolation, loss of confidence and self-esteem which
ultimately leads to the erosion of a healthy society.
Unemployment has also contributed to the increases in international legal and illegal migration
with a notion that it will enable them to get decent employment as well as better life. Excessive
unemployment, as per the economics literature, is an indication of the failure of the economy to
utilize the available human resource (Mankiw, 2001) argues that higher unemployment is one of
the most serious macroeconomic problems that affect a society directly and indirectly; and this is
why it is a frequent topic of political debate and politicians often claim that their proposed
policies would help create jobs.
Consequently, the level of unemployment of a country is widely used as overall status indicators
in evaluating the current performance of the economy. Studies indicate that many nations in the
world, particularly developing countries, have serious problem of unemployment that could
affect their economic performance. According to ILO (2016) some countries that have been
characterized by high unemployment rate of age 15+ are South Africa (27%), Lesotho( 27.8%),

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Occupied Palestinian (27.0%), Swaziland (26.3%) and Mozambique (25.2%).Whereas, countries
with the lowest unemployment rate are from southern Asia ,such as, Qatar, Cambodia, Thailand,
Myanmar, and Bahrain and few African countries such as Niger(0.3%) & Rwanda (0.9%).
According to the ILO‘s new estimation, based on improved data sets and methodologies, the
global unemployment rate is expected to fall slightly to 5.5 percent in 2018 (from 5.6 per cent in
2017), which marks a turnaround after three years of rising unemployment rates. However, with
a growing number of people entering the labour market to seek employment, the total number of
unemployed is expected to remain stable in 2018, above 192 million(ILO, 2018 cited in Dereje,
2019).
In Ethiopia, the aggregate unemployment rate is below 10 percent. But the unemployment rate in
urban is eight times higher than rural unemployment. For example, CSA (2016) report indicates
that unemployment rate in urban areas accounted 16.5 percent whereas only 2 percent in rural .In
addition, female unemployment has higher probability of being not employed compared to
males. According to statistical report on the 2018 urban employment unemployment survey
result reveals that unemployed population in urban areas of the country was 1,770,294 with
unemployment rate of 19.1 percent. This means that about 19 persons are unemployed out of 100
economically active persons aged ten years and above. And also the result shows that, the total
unemployment rate depicts a declining from 17.5 percent in 2012 to 16.8 percent in 2015 and
thereafter increases from 16.9 percent in 2016 to 19.1 percent in 2018. The differentials of
unemployment rate by sex demonstrate female unemployment rate (26.4 percent) is more than
double as compared to male (12.2 percent).
As survey result statistical report also shows, the rate of unemployment is 25.3 percent covers
1,096,936 unemployed population, which was higher than that of the total, adult and older age
categories. Female and male unemployment rates were 30.9 percent and 19.0 percent,
respectively. The overall unemployment rates show a fluctuating trend from 2012 to 2018. The
same is holds true for each sex during the last five survey periods. However, female are
characterized by higher percentage of unemployment rate compared to their male counterparts
(CSA, 2018)
There are some empirical studies conducted on urban unemployment in Ethiopia. Given the very
dynamic nature of urban areas on the one hand, and the inadequacy and limitation of data, on the
other hand, some of the studies conducted so far might relatively be too old to show the recent

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changes in the labor market. Furthermore, the government has recently been claiming that there
has been an encouraging achievement in creating employment opportunities, particularly for the
urban through its special programs such as Urban Housing Development program and
development of micro and small enterprises (MSEs.).
1.2 Statement of the Problem
Unemployment is the main challenges of many countries in the world. The issue of
unemployment gets a great attention globally in the agenda of poverty reduction. For instance,
the post- 2015 development agenda (SDG) includes 17 goals of which the 8 th goal focuses on
decent work and employment creation of a country(World Youth Report: Youth and the 2030
Agenda for Sustainable Development).
Ethiopian government also gives attention for the implementation of the goal to reduce
unemployment. However, there is little improvement in unemployment reduction as the overall
performance in employment creation has remained to be sluggish. On the other hand, Economic
growth in Ethiopia was continuously in double digit for the last two decades. According to
Ethiopia‘s Development Trends Assessment Report(2017) by USAID indicates that GDP growth
averaged 10.4% between 2004 and 2015 which propelled Ethiopia from the second poorest
country in the world to the 11 th poorest. Over the same period, the size of the Ethiopian economy
has nearly tripled (from US $17.2 billion to US $45.8 billion) GDP per capita is also doubled
(from US $730 to US $1,500) and the portion of the population living under poverty line (US
$1.90 per day) has decreased by 25%. Similarly, in 2017/18 nominal GDP was 84.3 billion USD
which equivalent to 2.2 trillion Birr. Despite the fact that the economic growth is rapid and broad
in Ethiopia; but, it fails to absorb all labor forces in the markets.
Even though Ethiopia is one of countries in Africa with fast economic growth, it could not
efficiently utilize the work forces that are essential to maintain the economic growth. In other
words, the government could not be able to create enough job opportunities that can absorb
potential labor forces through adopting appropriate employment policy. Economy is growing but
unemployment is raising particularly urban unemployment and the problem is higher among
youth. Right now, many Ethiopian youth are migrating to Middle East and European countries.
They are facing life challenges everywhere. Thus, the issue of unemployment is crucial and
urgent agenda for Ethiopian government.

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Unemployment rate in urban areas of regions had limited access to employment opportunities.
According to statistical report on the 2018 urban employment unemployment rate by region that
relies on the growth of employment opportunities, in Dire Dawa Administration 25.3 percent
(36,520 persons), Tigray Region 21.5 percent (148,758 persons), Addis Ababa City
Administration 20.2 percent (406,628 persons) and Amhara Region 19.7 percent (373,059
persons) in that order reported above the national average. Benishangul-Gumuz Region 7.2
percent (8,971 persons) is the lowest unemployment rate. The rest of urban areas of other regions
fall between 10 – 19 percent of unemployment rate in 2018.As regards, Oromiya Region
contributed the largest share of unemployed population to the total urban areas of the country by
456,147 persons with 18 percent unemployment rate. This implies that the share of
unemployment to the country total go along with the population size of urban areas of each
regions.
Taking into account the existing situation of high youth unemployment rate, in recent times, the
government has formulated new strategies to decrease the problem through promoting
entrepreneurship mainly small scale enterprise, and creating awareness for the youths to change
the attitudes of youths towards job preference and involving in the development activities of the
country (MOY, 2004).
Unemployment is one of the major problems faced by the under developed countries and the
developed one’s that the entire world must fight against these major issues. Therefore, policies
are needed to help unemployed people to develop skills and increase their access to information
and credits, so that they are better to make choice among available opportunities. When we see in
the case of Africa especially sub-Sahara Africa has a great problem of unemployment. This is
because of increase in population and declining of the economy of these countries. These ideas
tell that there is high degree of unemployment in Ethiopia which makes the society vulnerable to
different kinds of problems in their life. There are also factors or causes which are responsible
for the existence of unemployment.
In Alem Gebeya Town unemployment is a recent phenomenon. This is because of people’s
migration from rural to urban part of town, and there is also urban population growth. As the
town becomes urbanized the number of peoples increases and job opportunity for those people
becomes less and they become unemployed. Especially nowadays urban unemployment in the
town becomes the key problem. By completing this research, the researcher hopes to explore the

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many causes of unemployment, consequence of unemployment, a realization of the seriousness
of the problem in the town and suggestion as to what can be done to alleviate these problem.
However, to the best of my knowledge, no studies were conducted on the cause and
consequences of unemployment in the town and have received research attention so far.
Identification of those determinants of unemployment is very important to formulate proper
employment related economic policy that helps to reduce unemployment rate for the country as
general and for the study area particularly. Therefore, the aim of this study is to examine the
cause and consequences that affect unemployment status in urban Ethiopia with a special
emphasis on Alem-Gebeya town that help to formulate proper policy to take action in reducing
unemployment.
1.3 Research Question
This study attempts to address the following basic research questions at the end of the study.
1) What are the major causes that made to the rise of unemployment in the study area?
2) What are the major consequences of unemployment in the study area?
3) What are the best policy measures to reduce unemployment in the study area?
1.4 Objective of the study
1.4.1 General Objective
The general objective of this study is to examine the Cause and Consequences of Unemployment
in Alem Gebeya town.
1.4.2 Specific Objectives of the Study
The specific objectives of this study are:
 To explore the major causes that made to the rise of unemployment in the study area
 To determine the major consequences of unemployment in the study area
 To forward some policy to reduce unemployment in the study area.
1.5 Significance of the Study
Unemployment is the global issue in the world and of which Ethiopia is one in general and in
Alem-Gebeya town in particularly. Some studies try to concentrate on the degree and
determinants of the definite factors that hinder youth employment. The one which makes this
study different from the other is that it tries to address factors that bring high unemployment in
the study area.
Accordingly,

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  The study is restricted to a single town, so it will be helpful to considerate the
determinants of urban unemployment in Ethiopia in general and specifically of
Alem-Gebeya town.
 It gives some clue on the characteristics and scope of the challenges related with
high intensity of unemployment.
 The finding is also projected to be useful for the formulation of policies and
strategies that assist the alleviation of unemployment.
 The finding will be used as a bench mark in order to undergo further analysis on the
subject.
1.6 Scope of the Study
Unemployment is the key problem of youth in Ethiopia. Likewise the number of unemployed is
increase in Alem-Gebeya town from time to time. But this study has been focused mainly on the
Determinants of Urban Unemployment in Alem-Gebeya town, specially focused on urban
kebele‘s of the town because to cover the over all areas of the country remain a numbers of
problems that constraints such as lack of enough time and skilled human power.
1.7 Limitations of the Study
The major difficulty encountered during this study was mostly due to missing data in most the
variables of the data set. This caused the researcher not to capture relevant information on the
variables. Similarly the study faces challenges of coverage of the total population, because such
type of study might be requires the consideration of large sample size. Other additional limitation
occurs due to unwillingness of respondents' cooperation or interviewer error, address changing,
the frequency of interviewing may arise because of faulty responses due to vague questions,
memory errors, deliberate distortion such as prestige bias, in appropriate informants, miss
recording data of responses and interviewer effects. Beside the above limitations since the study
is specified to a single town this may create some problem in generalizing the whole challenges
of youth unemployment in the country level. Assessing the determinants of unemployment is
difficult as it is the collective effect of different socio-economic and demographic factors.
1.8 Organization of Chapters
This research thesis is organized as follows. Chapter one covers background of the study,
statement of the problem, objectives of the study, significance and limitations of the study.
Chapter two covers literature of past researches done in relation to unemployment and broad

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unemployment. Chapters three discusses the methodologies used in this paper to reach the
objectives set in the chapter one. Chapter four discusses the findings of the result; chapter five
discusses conclusions and recommendation of the research.

CHAPTER TWO
2. LITERATURE REVIEW
2.1 Theoretical Literature
2.1.1 Concepts and Definitions
Economically Active Labor Force: As defined by the United Nation System of National
Accounts (UNSNA), economically active population comprised all persons of either sex who
furnish the supply of labour for the production of goods and services. In other words, it refers to
persons who are engaged in work or available to engage in the economic or productive activities.
Employed Labour Force: The employed population is defined as persons above specified age
who perform some work for wage, salary, profit or family gain in cash or in kind during the
reference period. More generally, employed persons are those people who are engaged in
economic activity to produce goods and services as defined by UNSNA.
Employed person: -According to the ILO definition, those people who have worked more than
one hour during a short reference period (generally the previous week/day),(ILO, 2011).
In this regards, there are important indicators of employment such as employment-to-population
ratio, employment by occupation and industry, status in employment, number of hours worked
and payments.

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Economically Inactive Population: This refers to persons who are neither engaged nor
available to provide their labour. Economically inactive population are not considered as
unemployed person and they are excluded from unemployment analysis because of not fulfill the
definition of unemployment.
Unemployed Labour Force: According to ILO definition, it is a person of working age (15 or
above) who being without employment, available for work and actively looked for a job in the
previous month. Based on this definition it is calculated by taking the difference between
economically active labour forces and employed labour force.
Employment rate: -The fraction of the labor force that is employed, i.e. the number of
employed divided by the total labor force.
Unemployment rate: -The fraction of the labor force that is unemployed, i.e. the number of
unemployed divided by the total labor force (ILO, 1992).
Youth: - The UN defines youth as the age group between 15 and 24 years old, but, the term
‗youth‘ follows the Ethiopian context definition of those persons between the ages of 15 and 29
years (FDRE, 2004).
Youth labor force: - Consists of people between 15 and 29 years old who are either working or
actively looking for work, excluding youth who are economically inactive (MOY, 2004).

2.1.2 Types of unemployment

Several types of unemployment may be experienced in an economy such as that of Ethiopia and
they include: frictional, seasonal, cyclical and structural unemployment.

2.1.2.1 Structural Unemployment

Structural Unemployment, one types 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 in order to obtain a new job (ILO, 2007). Structural unemployment is hard to separate
empirically from frictional unemployment, except to say that it lasts longer.
In other words Structural unemployment is unemployment which is the outcome of absence of
demand for the workers that are available.
There are two major reasons that cause absence of demand for workers in a particular industry:

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1. Changes in Technology: As personal computers replaced typewriters, typewriter
factories shut down. Workers in typewriter factories because unemployed and had to find other
industries to be employed in.
2. Changes in Tastes: If bagpipes become unpopular, bagpipe companies will go bankrupt
and their workers will be unemployed.
Seasonal unemployment may be seen as a kind of structural unemployment, since it is a type of
unemployment that is linked to certain kinds of jobs (construction work, migratory farm work).

2.1.2.2 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 in
order 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 be long due to skills the college graduate has to offer a
potential firm (ILO, 2010).
Sources of frictional unemployment include:
 People entering the workforce from school.
 People re-entering the workforce after raising children.
 People changing employment due to quitting or being fired (for reasons beyond
structural ones).
 People changing careers due to changing interests.
 People moving to a new city (for non-structural reasons) and being unemployed
when they arrive.

2.1.2.3 Cyclical Unemployment

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Unemployment that is attributed to economic contraction is called cyclical unemployment. The
economy has the capacity to create jobs which increases 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 on 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 book
keeping have been replaced by highly efficient (ILO, 2009).

2.1.2.4 Seasonal unemployment

It arises when workers are laid off during off seasons. This type of unemployment is common in
sectors such as agriculture.
Other concepts related to unemployment are long-term unemployment and hidden
unemployment.
Long-term Unemployment: Long-term unemployment in European Union statistics, defined as
unemployment lasting for longer than one year.
Disguised (hidden) Unemployment: Disguised occurs when people do not have full time
employment, but are not counted in the official unemployment statistics.
This may include:
• People on sickness / disability benefits (but, would be able to do some jobs) 
People doing part time work.
• People forced to take early retirement and redundancy

2.1.3 Theories of Unemployment

The theoretical issues of unemployment attempts to explain the causes and effects of
unemployment in many nations. Economic literature provides many explanations for the
determinants of unemployment. Some causes blame the economic systems, and others blame
other factors such as foreign debt and population growth. Still, other theories shift the problem to
external sources and shocks, or unpredictable events, and other argue that technology and labour

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market institutions are the causes of unemployment. In addition, other theories assumed that
deficiency in aggregate spending and innovations are the essential factors for explaining the
problem of unemployment.

2.1.2.1 Human capital theory

According to this theory, education is considered as an important asset for economic
development as well as securing decent and productive job. Schultz (1961) noted that education
plays a great and significant role in the economy of a nation. It increases the productivity and
efficiency of people by increasing the level of cognitive stock of economically productive human
capability which is a product of innate abilities and investment in human beings. He further
illustrated that education increases the chances of employment in the labour market, allows
people to reap pecuniary and non-pecuniary returns and gives them opportunities for job
mobility, and leads to greater output for society and enhanced earnings for the individual worker.
He furthermore, stated that higher education provides the skills needed to perform complex jobs,
making people more productive, thus sustaining economic growth. People with the most human
capital are said to be the most productive, and thus secure the best jobs and the highest salaries.
Thus, education plays an important role in determining the employment status of an individual.

2.1.2.3 Social Capital Theory

The necessity of social capital begins in the work of the James Coleman, Francis Fukuyama,
Robert Putnam, and Pierre Bourdieu; 2011 as cited by (Aslefew, 2011). Whereas these four
scholars vary in disciplinary base and emphasis, they contribute to a focus on feature of social
relations, namely, values, norms, and networks or social capital and the role they play in social
cohesion.
Community is central to theories of social capital in that norm, values, and networks produce and
reproduce communities, are they geographical, face-to-face neighborhood communities,
informational communities and networks, or civic communities of social or political engagement.
Social capital is concerned with specific types of social bonds that sustain a sense of connection
among individuals. Popular anxieties about a loss of community have entered social scientific
discourse through the concept of social capital. This theory advances on the necessities of the
social relation which help as the means to find a job.

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(Granovetter, 1973) noted that a close relation or social networks within the people are regular,
expressively concentrated association with the colleagues, and other members of workers as cited
by (Aslefew, 2011). The latest news will be easily dispatched and shared among other members
and creates conducive condition for the accessibilities of the job. Social capital is concerned with
specific types of social bonds that sustain a sense of connection among individuals. Popular
anxieties about a loss of community have entered social scientific discourse through the concept
of social capital.
While there may be broad agreement about the specific elements of the social that are
collectively called social capital, there are very important differences among these key theorists.
Those who have weak social relation with others are marginalized and damaged with lack of in
accessibilities of information which makes them to missed job opportunities in some degree, in
addition poor social relation leads to friendless and discriminate them from the community.
(Bourdieu's, 2011) notion of social capital does not fit into this continuum, which, broadly
speaking comes from a consensual, functionalist model of society. Bourdieu operates within a
conflict model of society, and his emphasis is on how networks recreate unequal social relations.
The consensual perspective tends to regard social networks as equally available to all. In the
conflict perspective, all social groups have networks, but not all networks provide equal access to
resources. Socially bounded and stratified networks reproduce those unequal social relationships.

2.1.2.4 The Job-Matching Theory

The concept of Job-matching depends on the labor market and the idea contains different
multidisciplinary professional skills with respective experience levels. As (Jovanovic, 1979)
pointed out positions that need skilled person are occupied by most educated adults as cited by
(Aslefew, 2011). A mismatch between the skill sets of the unemployed and the needs of
employers is the main reason behind structural unemployment. The mismatch comes about
because the unemployed are unwilling or unable to change skills or to move to a location where
their skills are in demand. As a result, it becomes very costly to match workers with jobs and
unemployment is often prolonged.
For example, businesses in a certain area may require young people with advanced information
technology skills. A young person living in this area but without these skills will have difficulty
finding a job his/her skills are not matched to the demand. Down a similar line of reasoning, a
young person with the required skills set but living in an area where these are not in demand

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because employers are looking for agricultural workers, will have an equally difficult time
finding work or may become underemployed.
An important trend in labor markets in more developed economies, influenced to a large extent
by globalization, has been a steady shift in demand away from the less skilled toward the mores
killed. This is the case however skills are defined, whether in terms of education, experience or
job classification.
The result of the changing composition of labor demand has led, and is leading, to a reduction in
the number entry-level, unskilled jobs, resulting in a mismatch for young people with low
education and skills levels. Cyclical unemployment can also influence skills mismatches
Skills mismatches are generally caused by two factors. Firstly, at a general level, the school
curriculum may not provide the skills employers are looking for. In most education systems,
there is still a clear lack of practical and experiential learning as well as of teamwork learning.
Experiential learning is very rarely used, as an effective way of gaining knowledge and
experience, yet it is probably the most powerful way of learning entrepreneurship. Moreover
teachers and university professors often have only limited experience in, and understanding of,
small businesses and self-employment. So they are not adequately trained or educated to teach
entrepreneurial skills young people. Secondly, the absence, or inaccuracy, of Labour Market
Information (LMI), i.e. information on what skills are in demand and where jobs are, will lead to
many young people making a choice of career that is not based on the realities of the labour
market.

2.1.2.5 The Theory of Job Search

Stephen and Jackman formulated the theory of job search. For Stephen and Jackman (1991), 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
wage 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 individual's
application depends on his/ her personal characteristics. Thus, they concluded that individual
factors and the degree of competition from other job seekers could affect the chance of finding a
productive job.

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2.2 Factors that influence Unemployment
Unemployment is the outcome of different socio-economic and demographic factors at macro
and micro level. The micro level factors are directly associated to individuals' demographic and
socioeconomic attributes while the macro level factors are related to the national issues (Toit,
2003). This study emphasizes on assessing individuals' demographic and socioeconomic
attributes that influence employment. These are broadly classified as demographic and socio-
economic factors. The detail is presented as follows.

2.2.1 Demographic Factors of Unemployment

2.2.1.1 Rural Urban Migration
The movement of people is one of the causes for the high levels of urban unemployment problem
in most developing countries (Raphael, 2005). Since people view migration as an avenue to
improve their status and learn new skills, they move in to urban areas for various reasons (Harris,
2010). Similarly, ILO (2007) and MOY (2004) noted that migration of people in their twenties is
very high in Africa. Moreover, they also state that often move to institutions for education and
training, but many migrants move for employment related reasons followed by their families. In
line with this, Okojie (2003) depicted that migration of youth has resulted in a concentration in
cities and towns where there are few jobs available in modern sector establishments.
In addition to this, Todaro (1994) and Mlatsheni and Rospabe (2002) state that rural to urban
migration and educated people is the very root cause for the high and ever rising levels of urban
unemployment. A study conducted by Anh et al (2005) and Yisak (2006) showed that having
migration experience are more likely to be unemployed than other migrants. Confirming this,
Nwuke (2002) noted that migrants are highly unemployed in urban areas. He further stated that
in a context where social relations are as crucial as qualifications, urban migrants searching for a
job face an uphill struggle of surviving, with limited social networks.
Sarr (2000) also reaffirmed that migrants are three times more unemployed than other migrants
in Africa. It might be possible to deduce that migrants are more vulnerable to unemployment in
urban areas.

2.2.1.2 Sex
According to Halleriid and Westberg (2006), being one of the demographic variables, sex reveals
substantial differences between female and male with respect employment opportunity. Females
are vulnerable both in short term and long term unemployment than males. ILO (2004a) also

14
conforms the activity rate of males have been much higher than that of females due to the
different opportunities society provide to males and females, and domestic activities for personal
or household use. Strengthening this point, Mlatsheni(2002) and Rospabe (2009) found that lack
of employment is more severe for females than for males as 63 percent of economically active
females are unemployed whereas 53 percent of males remain without jobs in South Africa.
They further noted that one of the reasons behind females‘ unemployment is that girls spend
much time in doing domestic work than boys. This leads them to poor academic performance and
sometimes withdrawal from education. It could be concluded that girls therefore end up with less
education and limited skills, and thereby resulting in high number of unemployed females.
In the same manner, differences between male and female with respect to employment has also
been prevalent in Ethiopia. With this regard, Guracello and Rosati (2007) state that female youth
across all ages are more likely to be unemployed and are much more likely to be jobless than
male youth. Another research conducted by Berhanu et.al (2005) noted that unemployment rate
among young female (20.24) was 38.7 percent while it was only 23.2 percent for young male in
the same age category during the same year. Besides, the CSA (2010a) unemployment report also
shows that out of 1,168,591 unemployed persons 41.2 percent were female youth.
2.2.2 Socio-Economic Factors of Unemployment

2.2.2.1 Education
Education is one the basic factors of employment. The achievement of lower educational level
reduces the chances of getting decent and productive jobs in the world of work In line with this,
Salvador and Killinger (2008), WB (2009), and Morris (2006) noted that 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 labour market, In other words, the chance of getting employment for more educated youth is
higher as compared to lower educated youth since they had the required knowledge and skills,
Similarly, Mlatsheni and Rospabe (2002) found that young people with secondary level
education (from grade 8 to grade 12) do not have a better chance to get a job than people with no
education. ILO (2004a) also confirms that young people with some education are vulnerable to
unemployment due to the lack of knowledge and skills required by the labour market.
Accordingly, unemployment is higher for youth had lower educational level in Africa. With this
respect, Okojie (2003) stated that unemployment in Africa concentrated among youth who have

15
received some education, He further added that youth who had limited education lack the
industrial and other skills demanded in the labour market, thereby making them unattractive to
employers who prefer skilled and experienced workers. Confirming this idea, Haji (2007) and
Anh et al (2005) found that youth who attain limited education are more prone to unemployment
in the continent. In addition to this, they noted that, training in Africa remains largely unrelated
to the labour market needs, which foster the existence of a degree of mismatch between the
demand for and supply of education.
In the same fashion, less educated has also been faced the challenge of being unemployed in
Ethiopia. In this regard, Guracello and Rosati (2007) found that amongst, the less educated face
more difficulties in finding employment in urban areas of the country.

2.2.2.2 Work Experience

According to ILO (2004), the lack of work experience reduces the chances of getting
employment in the modern sectors of the economy. On the other hand, it also added that young
people having work experience, something very much desired by most employers, increases the
possibilities of getting employment. Similarly, a study conducted by Foot (1986) found that
because of limited work experience and other personal characteristics, youth unemployment
tends to be high.
Moreover, Osterman (1980) noted that employers with desirable job characteristics preferred to
hire persons who already had some experience in the labour market. This invariably excluded
young entrant from the labour force. Anh et al (2005) and Hassen (2005) also illustrated that
besides to insufficient work experience, poor work habits, unreliability, and lack of dedication to
the job lead to the segmentation of young workers. They further noted that employers are usually
hesitant to hire young people who have little or no practical work experience since the costs to
retrain and/or upgrade skills of young workers are often too high. As a result, youths are
suffering from the lack the work experience, so that they spend considerable time in looking for a
job.

2.2.2.3 Household income

Household income is one of the socioeconomic factors that contribute to the problem of
unemployment. ILO (2004b) indicated that unemployment rates among people tend to decline as
household income increases. Peoples who reside in a better off family had higher chance of

16
getting employment since their family tends to invest more in the education of their sons or
daughters. Likewise, a research conducted by Anh et al (2005) and Rees and Gray (1982) found
that family income serves as an important factor in determining the employment experience of
Vietnamese. A family in which a young person lives is the strongest predictor of his or her future
in the job market. On the other side, they added that youth who reside in low income earning
family are less employed in the labour market.
Correspondingly, Morris (2006) showed that the significant effects of family economic status,
paternal occupation, education and parental divorce are notable in affecting the employment
status. He further noted that a better income earning household had a number of opportunities,
i.e. higher income can enable youth to have greater access to education, information and
connections. This could facilitate easy access to employment opportunities available in the
market. Also ILO (2010) reveals that people who reside in low income household have higher
likelihood of being unemployed than adults of being among the working poor. It also indicates an
estimated l52 million young people were living in poor households (with per-capita expenditure
below US$1.25 a day) in 2008, were unemployed. Strengthening this point, a study conducted by
Echebiri (2005) depicts that unemployment has affected from a broad spectrum of
socioeconomic groups, both the well and less well educated, although it has particularly stricken
a substantial fraction of youths from low income backgrounds.

2.2.2.4 Mothers and Fathers Education

Social network and status in family background have too much influence on youth
unemployment. If parents are unemployed, low education, live in poverty, are likely to replicate
similar style to the youth people, in the same way. Anita (2012) explained that family
background in education has its own impact on the supplementation of youth to the labor market
and also they stated that the higher the parents are educated, the less number of firms visited, and
large proportion of youth who have got job. (UNESCO, 2012) indicated that as a measure of
social status, family education's is an important factor in determining employment status of
youth. So, youth who had well educated parents could face less difficulty in getting jobs
compared with those youth whose parents were less educated or illiterate.
Similarly, Schiefelbein and Farrell (1982) stated that family background in particular father
education has an impact on the insertion of youth to the labor market. They also indicated that
the higher the education of the father, the smaller the number of firms visited, and the higher the

17
proportion of individuals who have found employment. Furthermore, Morris (2006) noted that as
a measure of social status, father education's is an important factor in determining employment
status of youth. Therefore, youth who had well educated father could face less challenge in
finding jobs compared with those youth whose father were less educated or illiterate.

2.2.2.5 Job Preference

Instead of perceiving for rewarding employment, self or otherwise, the youths waited for the
government to find employment for them (ILO, 2010). The Ethiopian government has these days
eyed on creating much more job opportunities for a number of citizens thereby reducing youth
mobility caused by poverty, through innovative policies that will create jobs and businesses for
young people in micro and small enterprises, urban agriculture, agricultural undertakings both in
rural urban areas (Xinhua, 2019). A study conducted by Echcbiri (2005) in Nigeria found that
most young job seekers preferred employment in the private sector. They would like to work in
banks, oil companies, manufacturing companies, major marketing companies, and so on. While a
large proportion of youth also preferred to work in the public sectors. With this regard, Berhanu
et al (2005) indicates wrong kinds of attitudes and job expectations on the part of youth is
prevalent, including the preference for white collar jobs as opposed to agricultural and manual
work. Moreover, they state that one of the reasons for wrong kinds of attitudes towards jobs is
the inadequacy and excessively academic orientation of the educational systems of the country,
and the result is still visible in the current situation. Therefore, job preference could be seen as a
factor for youth unemployment (Asalfew, 2011).

2.2.2.6 Social Networks

Social capital is key properties to search employment. Social networks are vital instrument to
find a job in urban areas with less expense and difficulty Social capital (Adams, 2008). Found
that youth who use social networks in finding employment are successful. On the other hand
Coleman, (1990) and Granovetter (1983) they also showed that young workers not utilizing
personal networks may miss job opportunities available through personal networks. Similarly,
Fernandez and Kelley (1995) also confirmed that youths with limited or deficient personal
networks may lack knowledge of employment opportunities available in the state or regions.
Consistently, Holzer,(1996) also discussed that the lack of labour information can be harmful to
young people labour market outcomes, which are influenced by an individual's access to

18
employment information via social networks. Toti, (2003) also noted that lack of labour market
information and access to the main information networks in the labour market decreases the
chance of getting employment.
2.3 Consequences of Unemployment
The inadequate employment situation has a number of socio-economic, political and moral
consequences (Berhanu et.al, 2005; Toit, 2003). Some of the consequences of unemployment are
as follows.
Unemployment fosters drug addictions: Unemployed young people are more likely to abuse
illicit substances than are employed young people. According to UN (2003) report, unemployed
are the main drug users in Sub Sahara Africa, which accounts 34 million young people
representing 7.7 percent of the continent's youth population. The report also indicated that
Cannabis sativa or marijuana is the main drugs consumed by youth in the region. Similarly,
Curtain (2000) stated that in the continent, delinquency, crime and drug abuse are on the increase
among unemployed youths. Other scholars Chigunta (2002) and Haji (2007) also confirmed that
some of the unemployed youth have become drunkards; others are on drugs such as marijuana
and mandrax. Therefore, unemployment fosters drug addictions.
Unemployment contributes to crime and violence: Unemployment also contributes for the
prevalence of crime and violence in societies where employment opportunities are limited. In
line with this, Okojie (2003) and Haji (2007) found that many unemployed run criminal
enterprises engaged in violence, armed robbery, car snatching, illegal fuel sales, and illegal
importation of arms. Some of which have reached alarming levels in several African cities,
having names such as "Area Boys" in Nigeria and "Manchicha" in Uganda. Echebiri (2005) also
noted that urban society is becoming increasingly criminalized, especially with the proliferation
of gangs. He added that crime and violence have been increasing in many parts of Sub-Saharan
Africa as a result of unemployment. Further, Chigunta (2002) states unemployed and disaffected
appears to play a significant role in African conflict
Unemployment results in psycho-social problem: Unemployment is a stressful life event that
makes people unhappy. Increases in the unemployment rate lower the happiness of evelyone,
particularly the unemployed (Bell and Banchflower, 2010). Consistent to this, Toit (2003) also
found that depression experience is the consequences of unemployment. Moreover, Berhanu
et.al (2005) state unemployment results social exclusion and a sense of hopelessness.

19
Commercial sex work is common among unemployed girls: Unemployment also facilitates the
development of street youths. Likewise, Echebiri (2005) noted that unemployment has driven
many women and girls into sex work in Africa. Struggling to Support their families and provide
care members of the household, they are often restricted in their opportunities for education and
training. The lack of job opportunities and their disadvantageous social role make them more
likely to end up as sex workers. Okojie (2003) also explained that lack of employment
opportunities has contributed to increasing feminization of poverty, and also encouraged
prostitution as a means of survival in several African towns and cities. Further, ILO (2005) stated
that, in Ethiopia, young unemployed women are unwittingly drawn into prostitution
2.4 Economic Costs of Unemployment
Unemployment affects economic development: Unemployment is challenging not only for those
affected, but also for the economy as a whole. Salvador and Killinger (2008) found that
unemployment among people implies unutilized labour potential and thus has a negative impact
on potential growth of the economy. Similarly, Berhanu et.al (2005) state that unemployment is
the failure to make use of an important factor of production for fostering economic growth. On
the other hand, the increase in criminality in a country as a consequence of youth unemployment
causes losses in foreign direct investment. For example, foreign investors have cited crime as the
biggest deterrent for investment (UNODC, 2003).
2.5 Empirical Evidences
There are a numbers of studies have looked at different aspects of the urban labour market in
Ethiopia (Krishnan, 1996; Krishnan et al., 1998; Krishnan, 2001; Serneels, 2001; Bizuneh et al.,
2001, Getinet, 2003; Asalfew, 2011; Tegegne, 2011; Asmare and Mulatie,, 2014; Gebeyaw, 2011;
Nganwa et al., 2015; Dejene et al., 2016 and Aynalem et.al(2016).
Some studies from Ethiopia indicate that the potential causes of unemployment in urban
Ethiopia include increasing number of 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 macro and micro level. The
micro level factors are directly associated to individuals‘ demographic and socioeconomic
attributes while the macro level factors are related to the national issues (Toit, 2003).
Asalfew (2011), the multivariate analysis showed that sex, migration, education, social network,
job preferences and access to business advisory services significantly determine youth

20
unemployment in Debre Birhan town. However, household income, father education, and marital
status were found insignificantly related to youth unemployment.
According to 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 negative relationship, signifying the inherent problem of
unemployment among women and the youth. Regarding migration status, in spite of the type of
job, a migrant is more likely to be employed than a non-migrant. This result can be an indication
of the obvious fact that there is unmet demand for domestic and casual labor in the city, a pull
factor for the rural poor and marginalized youth, particularly women. Thus, given the existing
push and pull factors from rural areas and the unmet labor demand in urban centers; the migrants'
supply of labor would be mutually beneficial to both the urban as well as the rural communities.
Dejene et al., (2016), conducted the binary logistic regression to assess the determinants of youth
unemployment at Ambo, Ethiopia. Their result showed that among the demographic variables,
age of the respondents and migration status were significantly related to youth unemployment
whereas marital status of the respondents was not significant. From the human capital variables
included in the model, education and health status of the respondents were significantly related to
youth unemployment, whereas participation in employment related trainings was not statistically
significant. Among the economic determinants, household income, access to credit and saving
services and work experience were significant. Access to job information and psycho-social
factors were the two social capital variables that were significantly related to youth
unemployment. As youths are more vulnerable to unemployment, efforts should be made by the
government to provide credit and training so as to facilitate their entry into business and
entrepreneurship. Migrants are the victims of unemployment in town. Therefore, the pushing
factors of migrants should be identified to arrest the continuous drift of youth towards urban
areas as this may worsen the unemployment situation in urban areas.
Asmare and Mulatie (2014) stated the major factors supposed to be affecting urban
unemployment, particularly graduates from higher institutions. These were: lack of good
governance (nepotism, corruption, bias and discrimination), lack of social networks, divergence
between skills and the labor market and low quality educational policy and system.
According to Nganwa et al (2015), between 2006 and 2011, the prevalence of urban
unemployment was high as compared to the total unemployment rate in Ethiopia. The study

21
showed that place of residence (regions), gender, age, and marital status significantly affect the
urban unemployment.
Aynalem Shita et al (2016) examined the factors which determine urban unemployment in East
Gojjam zone of Amhara Region, Based on the result of the logit model, seven of the explanatory
variables were found significant determinants of urban unemployment; of which age, work
experience, skill match, social network, and family prosperity affects unemployment negatively
whereas education and migration status affects unemployment positively. The finding of the
study indicated that urban unemployment who attend higher education are more unemployed
compared to illiterate at 10% level of significance. However primary and secondary education
did not affect unemployment significantly. In addition, it is found that migrant urban are more
likely to be unemployed compared to non-migrants.

2.6 Conceptual Framework

There are different factors that are responsible for youth unemployment. Hence, unemployment
is a complex and dynamic socio-economic phenomenon. The following conceptual framework
gives a brief illustration about factors that determine youth unemployment in case of
socioeconomic and demographic determinants was identified.
Figure 2.1: Conceptual framework of urban youth unemployment

22
 Demographic Variables
Age
Sex
Marital Status
Migration

Youth Behavior
 Social Network Youth Une m-
 Experience ployment
 Attitude towards job 
 Capacity & skill

Socio economic variables

Household income
Job Preference
Father education
Work experience
Educational status of the
respondent

Source: Developed by Researcher, 2021

23
 CHAPTER THRER
METHODOLOGY
The chapter covers methodologies applied in implementing the objectives set for this specific
paper using primary data. This chapter is organized as follows; brief background on the study
area and data collection procedures, sample design, sample size determination, data analyzing
techniques, and model specification.
3.1 Description of the study Area
Silte zone is SNNPR. It is divided in to Ten woredas and three administration. Sankura
woreda is one of these woreda as which the study is concerned with relative location of the
sankura woreda is, It is located in North Dallocha woreda, south and west Hallaba zone north
west Mitto Woreda south and Eastern Hadiya zone , East and Northern Hulbarag woreda .
total area of 384.45 km²
3.1.2 population and language
The total population number of silte Zone is 1,o16,012 from this population sankura woreda
constitute 149,445 Sankura woreda people speak a language called Siltigna which belongs
Semetic language Family.
3.2 Research design and approach

A mixed research approach of both quantitative and qualitative approach was employed, and
a survey research design in which cross-sectional research was used since it measures the
current assessment of urban poverty and coping strategies of the urban households to urban
life in the town.

3.3 Sampling Technique

The sampling technique used was a random sampling technique so that each unemployed
would have an equal chance to be selected. The sample frame was the registered
unemployment list collected through census by the support of Central Statistical Authority
and the list was updated whenever a new unemployed come to the town as a resident and
seeks to obtain any service. So, from the total population of the town 123 sample size was
determined using mathematical formula developed by Yaro Yamani Formula where sample
size “S” is

N
S= 2
1+ N (e)
 Yaman, (1967) where
N = total unemployed population = 11174 source from Shambu municipal office.
I = a constant
E = allowable error 9/100 (9%) = 0.09
S=

S=

S=

S=

S=
S= 122.61 ≈ 123
Therefore, the sample size is approximately 123 households. The sample size from each

kebele was drawn on equal proportion using proportionality, ni= , where Ni= total
population of each kebele, n=total sample size of the research, N= Total population of both
kebele.

Table 1: the sample size of each kebele

Sample kebeles Number of households Sample size

01 kebele 7000 77

02 kebele 4174 46

Total 11174 123

Source:- Own field survey

3.4 Source of data

All the necessary data required for the study would be obtained from both primary and
secondary sources by using multiple tools of data collection. Both primary, secondary data
and even personal observation was used to carry out the study. The primary data would be
obtained through structured questionnaires. The structured questionnaires were posed to the
unemployed with the support of the enumerators. A secondary source was written documents
from the previous working pieces of literature, statistical facts and figures. Having this two-
source the writer will draw a conclusion with observation and experience.

3.5 Data Collection Techniques

3.5.1 Questionnaires:
For conducting the research a set of questionnaires was developed based on the research
objectives after consultation with research supervisors before going into the field. The
questionnaires deals with information on the socio/demographic characteristics of the
respondents, and household characteristics. It also deals with primary occupation, income,
and expenditure. The questionnaire includes information on urban unemployment. In order to
obtain directly comparable information, the questionnaires were structured questions, but
open-ended questions were also included to gain wider insights into the urban unemployed
perceptions.
Besides this relevant information was collected from the municipality, kebele administration,
and some selected urban residents through interviews. Regarding the secondary data
published and unpublished documents were reviewed and Personal observation would be
used to examine the types of houses they live in and service found around the town.

3.5.2. Interviews

In-depth interviews were conducted with some selected informants about their living
conditions and the survival strategies they use. The information gathered through this process
was useful in understanding the depth of the problem and the coping strategies used.

3.5.3. Field observation

Personal observation of the researcher has also helped to get in-depth knowledge about the
living condition of households in the study area. It had been employed to observe
characteristics of urban poverty and households coping strategies to urban life.

3.6 Data Analysis Techniques

There were a number of phases of data preparation and analysis in arriving at the results of
the study. The data obtained would be edited and coded simultaneously. Through editing, it
could be verified whether questionnaires were correctly filled in and the skip patterns were
followed. It is verified whether there is consistency among the recorded responses. Open-
ended responses were recorded verbatim and these verbatim responses would be then
categorized by their commonness and frequencies.

Coded data would be entered into a computer database using Statistical Software SPSS
(Version 23). Then data were run for cross-tabulation and rechecked to find out
inconsistencies and errors of coding. This phase of data preparation ensured that few if any,
minor numerical errors in coding would inadvertently be incorporated into later procedures
creating the possibility of misleading results. In the study, the data would be analyzed by
using both descriptive and inferential statistics, while descriptive statistics were mainly used
to classify and summaries the numerical data, inferential statistics were used to make
inferences by using the corresponding characteristics of the sample households. The
quantitative data which was collected and gathered from the survey were checked visually for
completeness and then coded. Then quantitative data collected through questionnaires were
analyzed and interpreted by using descriptive statistical and inferential tools like percentage,
frequency, bar graphs, tabular, and binary logistic regression analysis were used.

At the first stage of analysis, data on socio-demographic and economic characteristics of

urban poverty could be analyzed by descriptive statistics where frequency distribution and
percentage. In the second stage of the analysis, determinants of urban poverty have been
analyzed using binary logistic regression. In the final stage of the analysis, the strategies that
various urban households are using for purposes of coping with urban poverty could be
analyzed by descriptive statistics. In the qualitative method, the existing situation of the
problem of urban poverty collected through interviews and field observation were organized
and analyzed thematically or narration by making summaries of the respondent’s views.
Finally, conclusions and recommendation were formulated based on finding.

3.7 Ethical Considerations

The investigator would respect participants in giving recognition and informing them about
the study, the right to freely decide whether to participate in a study and the right to withdraw
at any time. The participants were informed about the purpose of the research and their
consent would be asked. All participants who were involved in the study up on were with
their willingness and consent.

During data collection, reasonable attention was given to the social, cultural, economic and
political dimensions of the respondent to keep the wellbeing, health, values, and dignity of
the targeted community and individuals. Besides, informants were told that their anonymity
would be maintained and the information they provide would be held in strictest confidence.
The investigator would hold the identity of each participant and all case's names were kept
confidential. Therefore, the data was used for this academic research and the informants were
not exposed in any phase of the research.
CHAPTER FOUR
4. RESULTS AND DISCUSSION
In this part, the study analysed the data that were collected from both primary and secondary
sources. Primary data were collected by using questionnaire. The questionnaire was prepared
for 100 unemployed individuals in the town. Secondary data is collected from different
sources like Central Statistics Authority (CSA), Micro and small scale enterprise office and
Alem Gebeya town police administration office. After the data were collected from primary
and secondary data sources the researcher analyzed and interpreted the data depending on
different views from the respondents and facts which is related to unemployment.
4.1. Demographic Characteristics of the Respondents
Table 1: Age group and sex of the respondents
Age group Sex Respondents
Male Female Total number Percentage
14-32 54 36 90 90%
33-50 2 8 10 10%
51-70 - - - -
Greater than 70 - - - -
Total 56 44 100 100%
Source: own survey (2021)
As we observe from the above table high rate of unemployment is registered to the age group
of 14-32 and low rate of unemployment is registered at the age group of 33-50 and there are no
unemployed respondents whose age is greater than 50 i.e. age group (51-70). This means 90%
of unemployed individuals are the productive ones and they are under the youth group. This
indicates that the youth are the productive section of the society which becomes unemployed,
so that their contribution to the economy of the town is low, because they don’t have any job
that increases their income.
Table 2: Martial status of respondents
Marital status Respondents
Male Female Total number Percentage
Married 11 16 27 27
Unmarried 42 23 65 65
Divorced 3 5 8 8
Total 56 44 100 100%
Source: own survey (2021)
The marital status of both female and male affect their participation in different working
activities. The above table shows that the number of unmarried unemployed is greater than
that of married and divorced. The percentage share of unemployed married, unmarried and
divorced individuals are 27%, 65% and 8% respectively. Hence, there are no more jobs in the
town as they are unable to get work and they face difficulty to lead their life as well as their
family.
Table 3: Educational background of respondents
Level of Education Respondents
Male Female Total number Percentage
Illiterate 4 3 7 7
Completed primary school 28 18 46 46
Completed high school 15 20 35 35
Diploma 3 4 7 7
Degree 5 - 5 5
Master - - - -
Total 55 45 100 100%
Source: own survey (2021)
The above table shows the educational back ground of the respondents. Here, the problem of
illiterate unemployed exists because they don’t have any certificate which indicates that they
have not graduated from college or university. And, this is because most of the people have not
completed their education due to different reasons like they don’t get support from their family
and lack of initiation. The percentage share of illiterate respondents is 7%. The problem of
educated unemployed highly exists in primary school completed 46% followed by 35% of
high school completed respondents. Educated unemployed individuals for diploma and degree
accounts 7% and 5% respectively. Since most of unemployed individuals are primary and high
school complete, they face difficulty to get job as they do not graduate from any institution i.e.
they do not graduate from university or college.
Table 4: Respondents living condition
The respondents live with Respondents
Male Female Total number percentage
With father and mother 27 15 42 42
With mother only 8 7 15 15
With father only 3 3 6 6
With relatives 7 17 24 24
With friends 10 3 13 13
Total 55 45 100 100%
Source: own survey (2021)
Table 4 indicates that most of unemployed individuals live with their family that is they live
with their father and mother. Since they do not have any income for their living they are forced
to depend on their family which accounts 42% and individuals who live with their mother
only, father only, relative only and with friend accounts to 15%, 6%, 24%, and 13%
respectively. So, this implies that even if they have power to work but they could not get job
because of lack of education, and lack of job opportunity which is not available in the town.
Table 5: Shows the respondents who had job before and do not have now
Have you been employed Respondents
before? Male Female Total number percentage
Yes 9 10 19 19
No 46 35 81 81
Total 55 45 100 100%
Source: own survey (2021)
The table shows that unemployed respondents who had jobbed before and who do not have
been jobbed even before this time. The individuals who had job before accounts to 19% and
most of the individuals around 81% do not have any job before. From these we understand that
most of the respondents had no job before this time, this is because of that unemployment is
not the problem of today but it is a problem in the previous time for the town.
Table 6: Shows the respondents who had job before and in what type of work they
engaged.
The type of work they engaged Respondents
 Male Female Total number percentage
Self employed 10 8 18 94.7
In government works - - - -
Non-governmental works - 1 1 5.3
Total 10 9 19 100%
Source: own survey (2021)
From the above table we can deduce that 94.7% of unemployed individuals were engaged in
self- employed activities and 5.3% of unemployed individuals were engaged in non-
governmental works, but he/she is not continued until now with those jobs as their job is not
permanent as compared with government works. And there are no respondents from
government works.
Table7: Illustrates people who had no job before and from where they get income
From where they get the Respondents
required income Male Female Total respondents Percentage
Depending on their family 46 32 78 96.3
Depending on their relatives - 3 3 3.7
From the money accumulated - - - -
before
Total 46 35 81 100%
Source: own survey (2021)
The table above indicates that respondents who had no job previously and in what way they
found income for their living. Here, 96.3% of unemployed respondents get income from their
family and 3.7% get income from their relatives and none of the respondents have
accumulated income before. From this one conclude that since most of the individuals are
unemployed they do not have any share to develop the economy of the town as well as the
economy of the country.
Table 8: Unemployed by duration of time
For how long you becom Respondents
unemployed? e Male Female Total respondents Percentage
For half year 18 9 27 27
For one year 12 15 37 37
For 2-5 year 18 8 26 26
For greater than 5 year 8 12 20 20
Total 56 44 100 100%
Source: own survey (2021)
The table indicates that the duration of unemployment for the respondents’ and shows for how
many years or for how much time the individuals become unemployed. About 27% of the
individuals become unemployed for half year, 37% of the individuals for one year, 26 percent
of the individual become unemployed for 2-5 years and 20 percent of the respondent do not
have job for more than five year. This implies that the longer period of unemployment duration
exacerbates the problem of unemployment and the shorter period of unemployment duration
lowers the problem of unemployment.
4.2. Major Causes of Unemployment
The cause of unemployment is different for different countries in the world. This means that
the cause of unemployment in developed country is different from that of underdeveloped
country. The cause of unemployment in underdeveloped country is mostly linked with lack of
education and inability of the country to create job opportunity, but in the case of developed
country the cause is related to technological advancement. Nebil, et al. (2010) identified poor
economic performance of the country and higher rural urban migration as a main cause for
youth unemployment.
Table 9: Major causes of unemployment explained by the respondents
Major causes Respondents
Male Female Total respondents Percentage
Lack of job opportunity 22 16 38 38
Lack of education 19 9 28 28
Migration from rural to urban 7 12 19 19
No better working place 8 7 15 15
Total 56 44 100 100%
Source: own survey (2021)
From the table we observe that the majority of the individuals become unemployed because of
lack of job opportunity, which account 38% and lack of education that is 28% of the total
 unemployed. The other that is migration from rural to urban and because of absence of better
working place covers 19 % and 15 % respectively.
Table 10: Shows respondents who says smoking cigarette and using shisha lead to
unemployment
Does smoking cigarette and using shisha lead to Respondents
unemployment? Male Female Total Percentage
respondents
Yes 51 41 92 92
No 4 4 8 8
Total 55 45 100 100%
Source: own survey (2021)
As it is indicated in the table the number of respondents who agree with the idea that smoking
cigarette and using shisha lead to unemployment (92%) is much higher than the respondents
who do not agree (8%). This implies smoking cigarette and using shisha leads to
unemployment.
4.3. Consequences of Unemployment
Unemployment is one of the most serious problems especially for underdeveloped country like
Ethiopia. Because of the existence of unemployment there are many consequences for
unemployed individuals. Its consequences are lack of peace and security, bad ethics, addiction
to bad practices, lack of self-respect, dependency and thefts and street dwellers.
Table 11: Consequences of unemployment in the town
Consequences of Respondents
unemployment Male Female Total respondents Percentage
Lack of peace and security 14 7 21 21
Bad ethics and addiction 13 11 24 24
Lack of self-respect 7 4 11 11
Dependency 24 20 44 44
Total 58 42 100 100%
Source: own survey (2021)
As explained by the respondents the main consequences of unemployment include
dependency, bad ethics and addiction, lack of peace and security and lack of self-respect. So
according to their responses 21% of the respondents affected by lack of peace and security,
about 24% affected by bad ethics, around 11% of them says unemployment results lack of self-
respect and 44% affected by dependency. This implies that the problems are not limited only
affecting the individual rather it extends to disturb or affect the society as a whole.
4.4. Effects of Rural-Urban Migration in the Town
Table 12: Effect of rural-urban migration explained by the respondents
Effect of rural urban migration in the Respondents
town Male Female Total respondents Percentage
Increasing of urban people in the town 17 11 28 28
Increasing of urban unemployed in the town 25 19 44 44
Increasing of poor people in the town 17 11 28 28
Total 59 41 100 100%
Source: own survey (2021)
According to the respondents response rural-urban migration has its own effect for the
increase of unemployment in the town. From the total of unemployed individuals 28% of them
said that the effect of rural urban migration is increasing of urban people in the town, 44% of
unemployed individuals said that the effect of rural urban migration is increasing of urban
unemployed in the town, and another 28% of unemployed individuals said that the effect of
urban-rural migration is increasing of poor people in the town. So, from these we can deduce
that rural urban migration is the cause for the existence of unemployment in the town.
4.5. Solutions to Reduce Unemployment in the Town
Table13: Solution to reduce unemployment
Measure that must be taken to reduce Respondents
unemployment Male Female Total Percentage
respondents
Expanding private institutions to create job 18 9 27 27
opportunity
Establishing government institutions 9 2 11 11
Establishing non-governmental intuitions 10 6 16 16
Give opportunity to self-employment 24 22 46 46
activities
Total 61 39 100 100%
Source: own survey (2021)
The table above shows that the response of the respondents to reduce unemployment in the
town. Around 27% of the respondents explain that expanding private institutions to create job
opportunities, 11% of the respondents says that to establish government institutions, 16% of
respondents says to establish nongovernmental institutions, and 46% of respondents asks seeks
opportunity for self-employment activities respectively. This could be the solution by their
intuition.
The researcher raises a question to the respondents about the problem of unemployment to the
social and economic condition of the town. Some of the problems of unemployment to the
social and economic condition of the town are the following.
 The existence of unemployment makes individual to become poor and they exposed to
malnutrition, because they do not get revenue (income) for their living, these in turn makes
them to exposed for moral hazard (demoralization)
 Unemployment lowers the country’s GDP i.e. unemployed individuals do not
contribute anything to increase the GDP of the county and they lack patriots for their
country because of these they become a problem to the economy as they disturb the
nations.
 Unemployed individuals do not participate in social/living or social life because they
are segregated from the society.
 In addition to the above, unemployed individuals are forced to do unnecessary thing
that means they make or participate in crime (crime expansion)
In Alem Gebeya town unemployment is still the problem for both literate and illiterate
individuals. In the case of educated certificate and diploma graduate are in searching of jobs
but not find ones. Likely degree holders face the problem of unemployment though not worse
as that of illiterate individuals.
According to the data from Alem Gebeya town police administration office unemployed
individuals whose age is greater than 18 exposed to crime. In the current year (2013), the
numbers of unemployed individuals who participate in crime are around 67. Both female and
male are participate in criminal activities. These individuals participate in different types of
crime activities like:
Stealing and theft
Robbery (use violence for stealing)
Use drugs and shisha or they use unnecessary drugs like shisha to steal money
or other material (good) from the society.
Table 14: The type of criminal activities that unemployed individuals engaged
The type of crime they engaged Respondents
Male Female Total Percentage
respondents
Stealing and theft 23 2 25 37.4
Robbery (using violence) 21 - 21 31.3
Use un necessary drugs and shisha to steal money 17 4 21 31.3
or other good from the society
Total 61 6 67 100
Source: Alem Gebeya Town police administration office (2021)
The table above tells us unemployed individual in the town are highly engaged in stealing
theft, which accounts 37.4% from unemployed criminal. The remaining who are engaged in
robbery and drug and shisha users are accounts 31.3% and 31.3% respectively from the total
unemployed criminal in the town. From these one can conclude that unemployment become a
serious problem to the town as it makes individuals to do criminal activities which is restricted
by law. As compared to female, male are highly exposed to criminal activities i.e. the number
of male who are engaged in criminal activities is higher than the number of female who were
engaged in criminal activities.
CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATIONS
5.1. Conclusion
Unemployment is one of the most serious problems basically for underdeveloped countries.
So, Ethiopia is the one among underdeveloped country which characterized by high rate of
urban unemployment problem. Alem Gebeya town is one among the urban areas of Ethiopia
which is affected by the problem of unemployment. Among the causes of unemployment in
the town lack of job opportunity, initial capital to start work, lack of skill and experience
(lack of education) and rural urban migration are the major ones. In addition to this smoking
cigarette and using shisha considered as the cause of unemployment in the town. The
consequences of unemployment in the town are dependency, bad ethics and addiction, lack of
peace and security and crime.
The study reveals that unemployment is higher in primary school completed and high school
completed individuals as they do not graduate from college or university. Most of
unemployed individuals are living with their family to satisfy their needs. Unemployment
also creates serious problems for the society as the unemployed individuals disturb the whole
society, because of these the society have no special attention for them.
Due to these they segregate from the society and do not participate in social activities.
In general, unemployment is a serious problem for individuals because it makes people to
become poor, and exposed to malnutrition due to lack of income for their living. The
unemployment lowers the country GDP as unemployed individual and also do not contribute
to the economy.
5.2. Recommendations
Based on the findings the followings were recommended.
 Since, unemployment is one of the problems which exist in Alem Gebeya town both
governmental and other concerned bodies like Non-governmental organization are
responsible to solve these problems like lack of job opportunity, lack of initial capital
to start work and lack of skill and experience are the causes of unemployment. So, the
government is responsible to reduce these problems by creating conducive
environment and allow the expansion of non-governmental organization by creating
conducive work environment for them.
 The expansion of micro and small scale enterprise play an important role to reduce
unemployment. So, the government should give special attention such worthy
enterprises.
 The government also responsible to encourage both foreign and domestic investors to
invest their capital in urban area. When they invest in the form of manufacturing
industry or organization it creates job opportunities for unemployed individuals.
 The government should create conductive environment and providing loan with
minimum interest rate for different enterprises.
 In addition to this, the government should initiate individuals to create new job by
themselves and giving rewards for those who become productive. This way best
reduce the problem.