Academic journal article International Journal of Business

Effect of Social Economic Development on Youth Employment in the Informal and Formal Sectors in Nairobi Kenya

Academic journal article International Journal of Business

Effect of Social Economic Development on Youth Employment in the Informal and Formal Sectors in Nairobi Kenya

Article excerpt


The central problem of the study was that despite government interventions, youth unemployment still remains a challenging policy area in Kenya with unemployed youth engaging in antisocial behavior like drug abuse, drinking and crime. Factors leading to unemployment have not been adequately investigated. The study sought to assess how social economic development affects youth employment in the formal and informal sectors in Nairobi, Kenya. The study adopted a mixed research design including exploratory, descriptive survey and quantitative design. The target population of the study was 2000 composed of all postgraduate students (assumed employers) and all undergraduate students (potential employees) of Jomo Kenyatta University of Agriculture and Technology, Nairobi CBD Campus, Entrepreneurship and Procurement Department. The study used stratified random sampling method to select a sample size of 150 respondents. Data was analyzed using both descriptive and inferential statistics. The findings of the study show that social inequality, economic activities, status and background, ethnic bias, method of recruitment and the macro environment are all significant factors in explaining youth employment in Kenya. The study recommended that government and policy makers should create specific measures to improve the macro environment, making it conducive for investors; create interventions to increase economic activities; strengthen laws and regulations to reduce ethnic bias and social inequality and promote furtherance of fairness and equality.

Keywords: youth employment; social economic development; Kenya


A. Background of the Study

Global unemployment rate stood at 197.1 million in 2015 (Economic Survey 2016) while World Real Gross Domestic Product (GDP) growth decreased to 3.1% in 2015 from 3.4% in 2014. High rates of youth unemployment represent both widespread personal misfortunes for individuals and lost opportunity for critical national and global economic development. Unemployment among the youth has been shown to have lifelong effects on income and employment stability, because affected young people start out with weaker early-career credentials, and show lower confidence and resilience in dealing with labor market opportunities and setbacks over the course of their working lives. Youth employment is one way to make Africa a strong, united, resilient and influential global player and partner (World Bank, 2015). On the African continent youth unemployment has highly contributed to most of the youth engaging in crime and violence and has fueled the high prevalence of civil conflict in the region (Natrass, 2002b). Youth unemployment has also contributed to the increase in international legal and illegal migration with a notion that it will enable them to get decent employment as well as better life.

Franz and Omolo (2014) found that youth tend to find employment in the informal rather than in the formal sector. According to UNDP (2013), 37% of household enterprises are owned by the youth. Despite this percentage, youth employment remains a key policy concern as articulated in the 2030 Agenda for Sustainable Development of the United Nations Goal 8 on decent work and economic growth. African Union (AU) agenda 2063 articulates that youth unemployment will be eliminated, and Africa's youth guaranteed full access to education, training, skills and technology, health services, jobs and economic opportunities, recreational and cultural activities as well as to allow them to realize their full potential. In both developing and industrialized countries youth are more susceptible to issues such as "long working hours, work with short-term and/or informal contracts, low pay and little or no social protection" (ILO, 2004, p.1).

Kenya's population is growing by about 1 million persons each year. The high population growth rate of the past results in today's youth bulge. …

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