Abstract
Ethiopia is one of the African countries with the highest rate of urbanization. Such high growth rate of Ethiopian urban centers presents enormous challenges to the nation. One of the developmental challenges facing urban Ethiopia today is unemployment. While there is little improvement in urban unemployment reduction, the overall performance in employment creation remained sluggish. Despite the growth in the labor force, employment growth is inadequate to absorb labor market entrants. The great concern here is, therefore, whether there should be substantial growth in job creation in urban areas to absorb new labor market entrants. This calls for a careful assessment of the current urban unemployment and labor market situation and efforts being done towards employment creation. On this ground, this essay focuses on conceptual, theoretical and policy-relevant description of unemployment and labor market situation in urban Ethiopia. Accordingly, urban unemployment, despite declining trend is still high, the problem being more prevalent among female and youth group. It shows great difference across regional urban level. The review on urban labor market situation of Ethiopia based on ILO KILM shows that urban labor force participation rate and employment rate do not show that much improvement; only about half of the urban labor force is employed as of March 2012. About one third of the total employed individuals were engaged in informal sectors showing the significant role of informal sector in urban Ethiopia as an important part of economic life which tends to absorb a considerable amount of the growing urban labor force. There are different policies and strategies introduced and implemented by the government for employment generations on both the demand and supply side in the public and private sectors. However, the employment creation role of both public and private sectors have been constrained by different factors among others are privatization, tax rate, lack of or inadequate finance/credit and infrastructure/facilities. For these the suggestions made are addressing the poor labor market situation of female; implementing labor-intensive employment creation strategies for the growing young skilled labor force; and arranging access to organized market, credit institution, modern technology, formal training and providing institutional protection for informal sectors.
Highlights
This calls for a careful study of the current urban unemployment and labor market situation, efforts The Main Objective of the study is to give insight into the being done towards employment creation and the challenges current unemployment and labor market situation in urban towards those efforts
A Economic Development; the existing national employment much better understanding of urban unemployment and the policies and strategies/NEPS/ and other major intervention functioning in urban labor markets, and forwarding key tools used in employment creation and policy policy implications is of a great importance
Recent trends suggest as Ethiopia’s economy showed improved performance including reduction in unemployment; urban areas of the nation are still characterized by high unemployment and for majority duration of stay without job is relatively long
Summary
Unemployment is one of the several socio-economic problems prevailing in virtually all countries of the world. Many urban centers in developing countries are challenged by high rates of unemployment. Despite the huge unemployed labor force, urban centers of these nations experience high rate of rural-to-urban migration, exacerbating the unemployment problem of urban areas [2]. In urban Ethiopia the labor force grows with an increasing proportion while the opportunity of employment is inadequate to absorb the labor market entrants and unemployment presents a particular challenge. This calls for a careful study of the current urban unemployment and labor market situation, efforts The Main Objective of the study is to give insight into the being done towards employment creation and the challenges current unemployment and labor market situation in urban towards those efforts. The essay intends to: Identify the factors/challenges that deter employment creation in urban Ethiopia
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