A recent paper by the International Poverty Center paints a familiar picture of unemployment in Kenya. Like many countries in Africa under and undemployment is higher in rural than in urban areas; more women are affected by these phenomena than men; and the young and old working-age workers are more affected than the rest of the work force.
Eduardo Zebeda’s paper Addressing the Employment-Poverty Nexus in Kenya compares the effectiveness of a job-creation and a cash-transfer programme in alleviating the failures of the Kenyan labour market. He finds that cash-transfers are very effective in rural areas because of the high dependency ratio. He also finds that well designed job-creation programs are more effective in reaching extremely poor people in urban areas. They have the added advantage of creating local infrastructure.
However in the end Zebeda finds that a tertiary qualification and employment in the formal sector are the most important determinants of household income. In the long run, therefore, only the creation of formal sector employment and more and better tertiary education will provide a check on poverty in Kenya.
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Nice writing style. I will come back to read more posts from you.
Susan Kishner
Interesting finding. However, I think that the conclusion of formal sector employment and more and better tertiary education ignores two facts: (i) in countries where the informan sector is one of the top employers, even educated citizens are more likely to find a job in that sector than in the formal or public sectors. This is because the former is underdeveloped and the latter is constantly downsizing. So in this case, the focus is to give incentives for informal companies to become formal. And (ii) the phenomenon of graduates unemployed is huge in many countries, including Kenya. A substantial number of young Africans are now seeking tertiary education but realise that once their degree is earned they are unemployed. On one hand, it is due to a mismatch between the degrees they obtain and the labour force requirements and capacity of aborption. On the other hand, it is due to graduates’ high expectations and desire to climb the ladder too quickly.
Yacine
Thanks for the response. I agree on both points. Three responses, just to stoke the debate some more:
i) While the informal sector can give you a job, it often leaves your underpaid or underemployed. Zebeda found that only about half of the ’employed’ Kenyans worked more than 38 hours per week.
ii) Graduate unemployment is a growing problem. But graduates are still more likely to find work than workers with fewer qualifications.
iii) Most of this discussion could only be of academic interest because the data that Zebeda’s work was based on is ten years old – which takes us to another set of problems in developing countries…