A critical review on rural youth unemployment in Ethiopia

ABSTRACT

Rural youth unemployment is a major challenge in Ethiopia that threatens its economic development. Most young people rely on subsistence farming for livelihoods, but land availability is declining due to population growth and fragmentation of plots. High underemployment and landlessness deprive many youths of work. Rural infrastructure is underdeveloped, hindering transportation and market access. Additionally, rural youth lack financial access to start businesses, leading to insignificant job creation in rural areas. As a result, many youths migrate internally to cities or abroad in search of work. Unless the government implements effective policies to address obstacles like landlessness, poor infrastructure, financial exclusion and lack of rural job opportunities, developmental problems will likely continue worsening in Ethiopia. Development depends on resolving rural youth unemployment.

KEYWORDS:

• Rural youth
• unemployment
• Ethiopia

Introduction

Youth unemployment is a major challenge facing many developing countries around the world (Geda, 2022). The global youth unemployment rate is estimated to be 5.8% in 2023, compared with 5.9% in 2019 (Ernst et al., 2023). Despite a minor increase in youth unemployment since the pandemic’s inception, population growth in Sub-Saharan Africa continues to push the labour force in which youths are being particularly at risk (Ibid), while effectively addressing this challenge is directly connected with decent employment and dignified livelihood as reflected in SDGs (ILO 2022; UN, 2022). Ethiopia is no exception, with its rapidly growing youth population facing limited employment opportunities, especially in rural areas (Bezu & Holden, 2014).

Ethiopia has a predominantly agricultural economy, being the second-most populous country in sub-Saharan Africa, with a population approaching 123 million people (UNDP, 2022b) and over 63.66% of the population employed in farming (World Bank, 2021a). However, the country is experiencing rapid population growth, which is outpacing the ability to create sufficient jobs (Getahun & Fetene, 2020). As the 2021 Ethiopian labour force survey revealed, the employment to population ratio of youth (ages 15–29) showed that of the total youth population of 26 million, about 73.62% are from rural areas. Meanwhile, about 57.4% of the total youth population were employed in different occupational groups − 46.7% from urban areas and 61.2% from rural areas. The survey also found that 68.3% of male rural youth and 54.3% of female rural youth were employed in various major occupational groups such as agricultural, service and industrial sectors (CSA, 2021b, 2021a). According to the Ethiopian Jobs Creation Commission (2019), the number of new jobs and opportunities created is far small. However, about two to three million young people enter the workforce each year, where they face high unemployment in cities and towns and already high underemployment in rural areas (UNDP, 2022b).

Rural youth make up the majority of Ethiopia’s population, yet they face significant barriers to employment. Factors like land scarcity due to population pressure, lack of rural job opportunities, and minimal access to education and skills training restrict their ability to find stable livelihoods. Consequently, many rural youths are underemployed or migrate to urban centres in looking for work (CSA, 2021a, 2021b). Ethiopia, as one of Africa’s fastest-growing populations and emerging economies, requires adequate management and efficient utilization of its workforce. In this regard, the economy’s capacity to absorb the prospective labour force must be reviewed on a regular basis, and an appropriate employment policy should be implemented as a result.

The Ethiopian government has introduced several policies and programmes starting from the National Youth Policy (2004) to the recently established Job Creation Commission (JCC) in 2019. It has also developed a 10-year plan from 2021 to 2030 to ensure rapid, sustainable and inclusive growth aimed at promoting youth development and employment. National strategies target issues like skills training, entrepreneurship support, and youth participation in governance. However, interventions specifically addressing rural youth unemployment have been limited (Woldehanna et al., 2018). Even, the current ‘Plan of Action for Job Creation’ aims to create 14 million jobs by 2025, ensuring accessibility for young people entering the labour force, through targeted services for excluded groups like refugees, migrants, people with disabilities, women and youth, though it lacks recognition of heterogeneity among youth such as rural, pastoral, uneducated and out-of-school youth (UNDP, 2022a).

As shown from the three national labour force survey results of the CSA and IOM (2021), the unemployment rate at the urban level in 2021 has increased by 1.54 times the rate in 2013, which means from 14.95 to 23.1% while decline from the COVID-19 time which was 25.7% in January 2020. However, a significant change of unemployment rate has been observed in rural areas, which changed from 1.33% in 2013 to 3.58% in 2021, which means 2.69 times the unemployment rate in 2013, while underemployment is obviously the manifestation of rural poor households in Ethiopia. Examining the issue through a gender lens reveals that the female unemployment rate in 2021 was significantly higher at 25%, compared to the male rate which was less than half that level at 11%. In this regard, it is important to analyse the capacity to absorb the available labour force, which needs to be monitored regularly, and to develop an appropriate employment policy (CSA & IOM, 2021).

Rural youth in Ethiopia face high levels of unemployment and underemployment due to limited access to education, training programmes, technology, transportation, and financial resources which restricts their ability to develop skills and start businesses (Yami et al., 2020). In addition, the rapid population growth and expansion of the workforce in the country have made it difficult for the country to generate sufficient employment, factors like population pressure on agricultural land and a lack of rural job opportunities have exacerbated unemployment and underemployment among rural youth (Geda, 2022). Interventions to address the distinct challenges facing rural youth unemployment and underemployment have been limited, leaving this a significant problem in Ethiopia may led many rural youths to migrate to urban areas in search of better opportunities. Thus, this paper aims to assess the current status of rural youth unemployment in Ethiopia based on a review of existing literature. It explores the key factors driving the problem and analyse policies and strategies put in place by the government with aim of identify areas for strengthening employment opportunities for rural youth. Addressing this challenge is important for realizing Ethiopia’s development goals and empowering its large youth population.

In contrast to the government’s efforts to address the problem of urban youth unemployment, the government’s intervention to address the distinct unemployment and underemployment problems that the country’s rural youth have been facing has been limited and started recently (Woldehanna et al., 2018). Despite these facts, the problem of rural youth unemployment and underemployment still exists in Ethiopia (Ayele et al., 2017). Therefore, the aim of this paper is to review the status of the rural youth unemployment problem through an extensive literature review and to suggest areas for improvement for effective employment creation. The rest of this paper’s contents were organized as a review and discussion of literature, conclusions, and recommendations.

Based on empirical, theoretical, and various organizational reports, this review was intended to address the following questions and suggested the future implications:

1. What is the current status of rural youth unemployment in Ethiopia?

2. What factors determine rural youth unemployment and what are its effects in Ethiopia?

3. What policies and strategies have been initiated to create opportunities for rural youth employment in Ethiopia?

Methodology

The review was conducted by reviewing short-term progress reports and published documents on rural youth unemployment in Ethiopia. This review employed a mixed approach that involves the analysis of rural youth unemployment data. Main sources include: (1) the World Bank Development Indicators (WDI) database (World Bank, 2021b), which was used to generate and present evidence of rural youth unemployment situations; (2) the National Labor Force Surveys (NLFS) and Central Statistical Agency (CSA), which showed current employment trends in Ethiopia, and (3) youth-related policy and strategy document in Ethiopia. Moreover, the methods used for reviewing the empirical evidence on the articulated objective were undertaken as follows (Figure 1).

Figure 1. Methodological framework of conducting a review.

To conduct this review, the researchers followed the above systematic frameworks while representing the extracted raw data from different organizations through tables and charts. The analysis of the extracted data was interpreted by identifying common themes, patterns, or trends related to the concepts. The interpretation considered both qualitative and quantitative data analysis, depending on the nature of the study included for the review.

Literature review

Definition of key terms and concepts

Youth: comprises part of society who are between the ages of 15 and 29 years (FDRE, 2004). The United Nations (UN) defines the youth as persons between 15 and 24 years old, WHO, 10 to 24. In Ethiopia, according to the national youth policy, youth include members of society who are between 15 and 29 years old.

Unemployment: is a situation in which workers are jobless because there is no work for them to do if they are prepared to and would accept lower wages. The International Labor Organization (ILO) defines the unemployed as numbers of the economically active population who are without work but available for and seeking work, including people who have lost their jobs and those who have voluntarily left work. While unemployment measures joblessness, underemployment provides a fuller picture of the underuse of labour resources, as noted in a recent article published in the Monthly Labour Review (Dey et al., 2022). Both metrics are important for understanding challenges faced by workers and opportunities for employers. A recent study from the International Labour Organization illustrated the distinction between unemployment and underemployment. In a 2022 report, the ILO estimated the global unemployment rate in 2022 at 207 million, while noting that ‘many more workers have inadequate access to employment opportunities that are productive and deliver a decent living’ (ILO, 2022, 2022a). This underscores that underemployment provides a broader lens than unemployment alone to understand labour underutilization worldwide.

Unemployment can take several forms according to recent labour market studies. Frictional unemployment, sometimes called search unemployment, occurs due to normal turnover in jobs as workers shift between occupations or locations (Cazes & Verick, 2021). This type of unemployment is temporary as job seekers transition between jobs. Residual unemployment is attributed to personal factors such as old age, physical or mental disabilities, poor attitudes or skills mismatches that make some workers less competitive in the labour market (ILO, 2022, 2022a). Technological unemployment, another structural form, stems from technological changes like increased automation, robotics or artificial intelligence that replace human jobs over time (Frey & Osborne, 2017).

Underemployment and disguised unemployment represent underutilization of labour resources. Underemployment refers to workers who are employed but working less hours than desired, such as part-time workers seeking full-time work (Kapsos & Bourmpoula, 2013). Disguised unemployment occurs in developing economies where additional workers at a workplace do not necessarily increase output levels due to inefficiencies (Joshi, 2020). Open unemployment is the conventional measure of unemployment, comprising jobless individuals actively searching for work but currently without employment (ILO, 2022a). Addressing these multifaceted dimensions of unemployment remains an ongoing challenge for policymakers seeking full and productive employment.

Empirical review

Status of general and rural youth unemployment in Ethiopia

Records show that between 1999 and 2013, the general unemployment rate in Ethiopia declined from 9% to approximately 5% (CSA, 2014). The unemployment rate in rural areas is quite low (below 3% as of 2013), due mostly to the prevalence of unpaid family work and self-employment activities; however, CSA (2014) data suggest that 27% of the employed individuals in rural areas are underemployed. Urban unemployment is much higher (approximately 20% in 2013). In Ethiopia, only a very small percentage of individuals work in paid employment, particularly in rural areas. Those who are not in paid employment are either self-employed or unpaid workers in family ventures. According to CSA (2015a, 2015c), at the national level, only 10% of people are in paid employment. This composition is different between urban and rural areas: in rural areas, only 4% of the employed individuals are in paid employment, whereas this rate is approximately 45% in urban areas. While the share of self-employment is largely similar (40% in rural areas and 39% in urban areas), the share of unpaid family work is disproportionately higher in rural areas (55%) compared to urban areas (13%). The unemployment problem in the country seems to be largely an urban phenomenon, with the high urban unemployment rate due mostly to high job-searching costs, mismatches between labour demand and supply, high rural-urban migration, and skills mismatches (Mekonnen, 2021).

The ‘trading economics’ website cites the central statistical agency of Ethiopia as stating that the unemployment rate in Ethiopia decreased to 16.80% in 2015 from 17.40% in 2014. ‘The unemployment rate in Ethiopia averaged 19.88% from 1999 until 2015, reaching an all-time high of 26.40% in 1999 and a record low of 16.80% in 2015.’ With unemployment rates the highest among the youth as compared with other age groups in the working section of the population, the rate would obviously go up even further, as stated above. Youth unemployment is embedded in urban and rural youth unemployment. In this respect, there is a general understanding that unemployment is an urban problem. This notion is, for instance, reflected in a research paper entitled ‘Youth Unemployment: Ethiopia Country Study.’ The study states:’’ The country’s unemployment rate is driven almost entirely by unemployment in urban areas. While unemployment appears to be an urban problem, the proportion of employed Ethiopians who were underemployed was present in both rural and urban areas, as cited by Wubie (2012). The general status of youth unemployment rates and their annual changes are discussed below (Figure 2).

Figure 2. World and Ethiopian youth unemployment status with the annual change.

Source (World Bank, 2021b).

Youth unemployment refers to the share of the labour force ages 15–24 without work but available for and seeking employment.

As 2021 World Back revealed that, Ethiopia has experienced fluctuations in its youth unemployment rate over the past eight years. The rate rose from 4.30% in 2016 to a peak of 6.65% in 2020, representing a 1.45% increase. This was likely due to economic impacts of the COVID-19 pandemic. However, the rate declined slightly to 6.14% in 2021. Unfortunately, the downward trend reversed in 2022 as unemployment climbed again to 6.33%, a 0.19% rise from the previous year. Overall, while the rate increased 1.03% between 2015 and 2022, there were also periods of modest declines from 2017 to 2019. The data suggests Ethiopia’s youth population continues to face challenges securing employment despite some year-to-year fluctuations in unemployment levels over the recent eight-year period.

Youth unemployment rate in urban and rural areas

According to the national context, youth comprise those persons aged 15–29 years. Based on the findings of the survey at the national level, the rate of youth unemployment in urban areas in February 2021 is 23.1%, of which males were 15.9% and females were 28.8%, while rate of urban youth unemployment in (2016, 2018, 2020 & 2021) by their sex are discussed in (Figure 3).

Figure 3. Urban youth unemployment rate by their sex.

Source (CSA & IOM, 2021).

Figure 3, shows that the rate of youth unemployment in urban areas increased from 2016 to 2020 and then declined from 2020 to 2021, while female youth unemployment rate is approaching double of male youth unemployment rate.

In contrary (Figure 4), the youth unemployment in rural areas registered about 8.1% of which the female’s rate (11.6) are more than double rate of males (5.1%). This indicates that rate youth unemployment in rural areas is highly increased from 2013 to 2021.

Figure 4. Rural youth unemployment rate by their sex.

Source (CSA & IOM, 2021).

Unemployment in Ethiopia is more of a problem for urban youth than rural youth (aged as 15–29). According to the Ethiopian labour force survey report, the unemployment rate of urban youth at country level was 22.9%, while it was only 3.1% in rural areas (LFS, 2013 cited at Essay, 2020), While lower than urban areas, rural youth unemployment of 8.1% indicates it remains a substantial issue. Unemployment disproportionately impacts rural females at 11.6% compared to 5.1% for rural males (CSA & IOM, 2021). This indicates that the unemployment rate was highly increasing in rural areas of the country. Youth employment poses a significant issue for Ethiopia. The country is experiencing rising levels of landlessness among rural youth as well as negligible job creation in agricultural areas. This could result in more young people migrating from rural to urban centres in search of work. With limited opportunities in the countryside, many Ethiopian youth may have no choice but to relocate to cities in hopes of finding employment, exacerbating urban unemployment and underemployment challenges. Addressing youth land access and rural job growth is important to stem this potential surge in migration and prevent worsening economic pressures in both rural and urban regions of Ethiopia (Abshoko, 2016).

In summary, the data demonstrates unemployment has a disproportionate effect on Ethiopia’s youth population compared to overall rates. It presents an even greater challenge for young women, both in urban and rural contexts. Addressing sky-high youth unemployment, particularly for females, is an economic and social priority for Ethiopia. Targeted interventions are needed to support greater workforce participation among youth.

While some view addressing urban and rural youth unemployment in Ethiopia similarly, Hiruy Wubie (2012) argues for separate considerations given differing causes and effects between urban and rural contexts. As the vast majority (over 80%) of Ethiopia’s youth population resides rurally, Wubie asserts unemployment must be examined from the perspective of rural land access, pointing out the Ethiopian constitution removed land from private ownership to redistribute it and create jobs for landless youth through agriculture. However, two decades since regime change, redistribution remains incomplete in many regions, indicating the new generation lacks firsthand access to rural land, the primary source of livelihoods and employment and requiring alternative policies are needed to generate rural jobs and remedy growing rural youth landlessness.

Factors affecting rural youth unemployment in Ethiopia

Rural youth unemployment in Ethiopia is influenced by several factors. One of the key factors is the lack of access to quality education and vocational training. According to a study by Yitateku & Beneberu (2020), many young people in rural areas do not have access to educational opportunities that would equip them with the skills needed to compete in the job market. This lack of education and training makes it difficult for them to find employment opportunities.

Educational attainment in Ethiopia remains relatively low compared to Sub-Saharan African averages, with primary completion at 56.7% versus 63.2% for SSA in 2020, and lower secondary and upper secondary completion rates of 27.2% and 13.8% respectively falling short of SSA’s 44.5% and 26.7%; moreover, while primary completion increased substantially from 2012–2020, lower and upper secondary increases of 6.2 and 2.8% points have not kept pace, and girls outperform boys at primary and lower secondary levels yet educational participation among 15–29 year olds is now higher for young men than women, highlighting more needs to be done to support rural girls through secondary school (World Bank Open Data, n.d..)

Several factors contribute to the high rate of youth unemployment and underemployment in Ethiopia. Rapid population growth has outpaced job creation, resulting in a large youth bulge entering the labour market each year (Tamirat, 2023). Rural areas experience even higher unemployment than urban centres due to lack of economic opportunities and infrastructure (Yitateku & Beneberu, 2020). Household income plays a role, as youth from wealthier families have greater access to resources that can help them find work (Yitateku & Beneberu, 2020). Social networks and membership in organizations also influence employment outcomes for rural youth (Yitateku & Beneberu, 2020). Lack of access to credit constrains some youth from pursuing entrepreneurship or further skills training (Yitateku & Beneberu, 2020). Gender disparities persist as well, with girls facing additional barriers to continuing their education (World Bank, n.d..). While entrepreneurship holds promise for creating jobs, more support is needed for young entrepreneurs in Ethiopia (Commonwealth, 2016). Addressing these interconnected challenges through targeted policy interventions is critical to realizing Ethiopia’s demographic dividend from its large youth population (Tamirat, 2023).

The COVID-19 pandemic has exacerbated the challenges of rural youth unemployment in Ethiopia. Public health measures like lockdowns and business closures disrupted economic activity and job opportunities across sectors, disproportionately impacting informal work where many youths typically find employment (ILO, 2021). Over 4 million jobs were lost during the early pandemic period alone (World Bank, 2020). Mobility restrictions prevented rural-urban migration for work or education that some youth rely on (ILO, 2021). School and technical training centre closures further set back skills development in rural areas with limited access to remote learning (ILO, 2021; UNICEF, 2021). This widened pre-existing education gaps compared to urban youth. Food insecurity increased as well during the pandemic, making poor rural households more vulnerable to unemployment shocks (WFP, 2021). Limited internet access and digital literacy in rural areas also hindered the shift to online platforms for work, education and services (World Bank, 2021c). While impacts are still emerging, the pandemic has exacerbated existing challenges of rural youth unemployment in Ethiopia through disruptions to education, employment opportunities, mobility and household welfare. Concerted efforts will be needed to address the fallout of COVID-19 and support rural youth.

Effects of rural youth unemployment

What such a condition does to young graduates is that it eats away their hope of a better tomorrow and their energy to serve society. Their focus is entirely on finding a short cut to financial success. The enthusiasm for social justice that characterizes fresh graduate’s fades with the increasing urge for financial success as their principles make room for personal gain no matter how.

Wubie (2012) highlights several serious effects of youth unemployment that are particularly relevant in Ethiopia. In rural areas, unemployment can lead to starvation for unemployed youth and their families, as young people without land are unable to establish families or support themselves. In urban areas, joblessness also prevents family formation. More broadly, unemployment contributes to a decline in living standards and reduced access to necessities like shelter, education, and healthcare. It increases vulnerability to issues such as substance abuse and hopelessness in education. Left unaddressed, youth unemployment threatens social stability and economic progress by fuelling frustration, instability, and making unemployed youth susceptible to manipulation. It also negatively impacts the overall economy. Therefore, solving Ethiopia’s youth unemployment crisis requires ensuring rural youth have access to land and opportunities are developed for new graduates in cities through job creation.

Rural youth unemployment has significant negative impacts in Ethiopia. According to the study by Geda (2022) unemployed rural youth face higher risks of poverty, food insecurity, and malnutrition. Without a stable source of income, they struggle to afford basic necessities for survival. Rural youth unemployment also has serious social consequences. Unable to support themselves or start families, unemployed young people’s ability to transition into adulthood is hindered. This can lead to increased rates of school dropout, risky behaviour like substance abuse, and even conflict with families and communities. On a national level, rural youth unemployment hampers Ethiopia’s economic and agricultural development. The country relies heavily on agriculture but is unable to benefit from the productive potential of its youth population. If left unaddressed, the issue threatens long-term food security and poverty reduction goals. Overall, addressing rural youth unemployment through job creation and skills training remains a pressing challenge for Ethiopia to promote inclusive rural development and growth.

Constraints of rural youth livelihood strategy choices

According to Ibrahim et al. (2010), youth livelihood diversification is impeded by both readiness and access-oriented factors. For them, readiness and access-oriented youth livelihood development interventions are highly interconnected. Therefore, in order to benefit from access-oriented opportunities, many marginalized youths need youth livelihood readiness investments (from the government, donors, or household actors, including the youth themselves). This includes formal and informal basic education, vocational and technical skills training, and programmes that focus on employability and the development of key cross-cutting work and life skills. Similarly, in order to convert readiness-oriented investments into viable livelihood activities, youth should have access-oriented interventions available to them. Access-oriented livelihood development programming also refers to interventions that improve young people’s access to market-driven products and services that can enhance their economic success, such as infrastructure, credit, land, market transport, skills, and other assets. The success or failure of these interventions often depends on providing both kinds of programmes concurrently (Start & Johnson, 2004).

According to WIDE (2014) and Adser et al. (2013), it is important to identify the constraints of particular rural livelihoods in each locality in addition to the determinants of cumulative diversification strategies. Hence, this study has identified the degree of influence of some major constraints on engaging in each livelihood strategy. These constraints have been found to have varying degrees of influence across livelihood groups. Land is an important determinant of livelihood in rural areas. As population increases and land scarcity becomes critical, non-farm activity and migration may become the only way out of poverty for land-poor farmers as well as the primary source of livelihood for the new generation of rural residents. It has been argued that the de-linking of rural livelihoods from farming has been on the rise for the past few decades in Africa (Rigg, 2006). If land-scarce farm households participated in the non-farm sector to diversify income and cope with shocks in the past, non-farm employment may now become the only source of employment for the children from such farm households. This situation is further reinforced by changes in youth aspirations fuelled by increased information and improved access to roads, which reduce transaction costs.

The investigation by Adser et al. (2013), and Bezu and Holden (2013) also shows the same findings. Youths who have sufficient farm land and those who have the chance of inheriting their parents farming land do not want to diversify their livelihood into nonagricultural activities, while those who do not have land access are very eager to engage in nonfarm wage work and urban salaried jobs. The descriptive statistics of the study show similar results on the influence of land access on livelihood diversification into non-farm activities. Besides, poor market linkage is one of the crucial problems for youths engaging in handy craft manufacture and cash crop production. According to Tedla (2019) study on East Gojjam Zone, which reveals that one of the informants in the Kola part of Enebsie Sarmidir district said, ‘I am working on fruit and vegetable production with my three brothers on our family’s farming land, which covers one hectare, through irrigation, we took the water by constructing irrigation canals by digging the mountain hills. It took almost eleven months and demands annual maintenance or rebuilding after the summer season. As you can see, there are around nineteen kinds of fruits and vegetables, coffee, and chat. But the problem is that almost all fruits and vegetables give products in the same season, which makes harvesting and transporting them to the market a difficult task for us. As you can see, there is no road or transportation service. No customer comes here unless we take it to the market; as a result, most products always remain perished in the field.’- p.30.

In contrary, one of the interviewees stated that “youth especially are so lazy; they don’t like to work hard, they get tired quickly, and they don’t work. Youth are lazy; they are always waiting for someone to come up with jobs; they want to be spoon-fed all the time; and they enjoy not doing anything. Youth don’t have vision, and they don’t see the opportunities available to them: ‘Everything is a joke to the youth; life is not serious,’ and they are lazy even though there are opportunities (Tedla, 2019, p. 31).

Even though the agricultural sector has played a major role in youth employment, the gradual process of transforming agriculture to the industry and services sectors has also been significant in creating employment opportunities for young people. On average, 1.2% of the labour force has been shifting from agriculture to services and industry sectors annually between 1991 and 2021. As the world bank data shows, the national employment percentage in the three major sectors (Agriculture, Service and Industry) was presented (Figure 5).

Figure 5. National employment by sector.

Source (World Bank, 2021a).

Despite the gradual transformation of the Ethiopian economy towards the service and industrial sectors, and its remarkable growth, a significant portion of the population still relies on subsistence farming. Smallholders face various constraints, including limited land availability, crop damage, animal diseases, inconsistent rainfall, outdated technologies leading to low productivity, and limited market information (Woldehanna et al., 2018). These constraints contribute to unemployment and underemployment in rural areas. The youth are particularly affected by these issues as land, which is the primary source of wealth in rural Ethiopia, has been mainly transferred through generations. Consequently, the youth receive less land than their parents did as it has to be shared between parents and their adult children. Rural youth face additional challenges such as lack of road and transport facilities, limited access to credit, job preferences among the youth, cultural values, poor market linkages, inadequate information networks, lack of training opportunities, risk-averse behaviour, poor working habits, and dependency syndrome (Tedla, 2019). The mean working hours of employed people within seven days across rural and urban areas and by sex are discussed in Table 1.

Table 1. Number of hours worked within 7 days preceding the survey period.

Place of residence and Sex	Total employed persons		Number of hours worked per week										Mean No. of hours worked per weeks
	No.	%	0	1–3	4–12	13–21	22–30	31–39	40–48	49–57	58–74	75+
Urban+ Rural
Total	42,403,879	100	2.8	1.2	11.5	16.9	17.9	15.6	14.9	9.1	7.5	2.6	32.5
Male	22,886,647	100	2.4	0.5	6.6	12.8	17.0	17.7	18.4	11.8	9.6	3.4	36.8
Female	19,517,232	100	3.4	2.0	17.2	21.8	18.9	13.1	10.8	6.1	4.9	1.8	27.4
Urban
Total	6,382,858	100	5.0	1.2	7.6	9.3	10.2	12.3	21.2	12.0	13.1	8.0	40.6
Male	3,529,307	100	4.6	0.7	5.3	7.5	9.2	12.4	23.1	13.4	15.1	8.8	43.3
Female	2,853,551	100	5.4	1.9	10.4	11.6	11.5	12.2	18.8	10.4	10.7	7.1	37.2
Rural
Total	36,021,021	100	2.5	1.2	12.2	18.3	19.2	16.2	13.8	8.6	6.5	1.7	31.0
Male	19,357,341	100	2.0	0.4	6.9	13.7	18.4	18.6	17.5	11.5	8.6	2.4	35.6
Female	16,663,681	100	3.0	2.0	18.4	23.6	20.1	13.3	9.4	5.3	4.0	0.9	25.7

Source (CSA, 2013).:

Individuals in rural areas have been facing challenges in establishing of non-farm businesses. Around 47% of rural dwellers reported that getting finance was the primary constraint to establish non-farm businesses. Market problems (including distance, cost, demand, and supply) and transportation problems took the second and third ranks, respectively, as the main hinderances for non-farm business establishments. The financial shortage was the worst hinderance for the unemployed individuals in rural areas to start their own businesses. Around 57% of the unemployed individuals reported that shortage of finance was the main problem to start own business in 2013; followed by land access problem. These challenges induced continuous rural to urban excess migration (CSA, 2013; Woldehanna et al., 2018).

Rural youth employment in the development agenda of Ethiopia

Ethiopia’s development plans (Agricultural Development Led Industrialization strategy) (1991) have aimed to shift the workforce from agriculture to industry over time through agricultural transformation and industrialization. However, rural transformation has progressed slowly, with the majority still dependent on low-productivity farming, while the majority of youth programmes have an urban focus (Woldehanna et al., 2018). As a result, absorbing large numbers of rural youth into manufacturing and industry remains challenging in the short-to-medium term.

The policies emphasize utilizing labour resources and improving agriculture’s earning potential. But with limited land access constraining youth engagement in farming, more focus is needed on off-farm opportunities in agro-processing, services, and entrepreneurship (Schmidt & Woldeyes, 2019). GTP-II targets’ cooperatives, credit access, and industrial park jobs for youth. However, capacity building and skills development for youth to take advantage of these, as well as market linkages support for youth businesses, have been inadequate.

Overall, fully realizing Ethiopia’s goals of productive rural youth employment will require sustained efforts in agricultural modernization to boost productivity and competitiveness. It is also crucial to strengthen implementation of policies targeting off-farm opportunities and ensure rural youth are equipped through training to participate meaningfully in emerging sectors. Targeted incentives may further help youth businesses compete more effectively. A long-term, multi-pronged strategy remains essential.

Youth-related policy review in Ethiopia

According to the Ministry of Youth and Sports (2016), it has prepared a new youth development and growth package that enables it to boost the benefits of youth across the country. The minister noted that the new youth development and growth package is prepared taking experiences from the last shortcomings and strengths of the youth political and development participation packages in the country. The new packages target increasing the participation of youth in the development endeavours of the country. The new package of initiatives is inclusive of the youth in rural, urban, pastoralist areas, and people with special needs, and it is expected to step up the multidimensional benefits of the youth segment of society. The Minister added that the new youth package is prepared to promote the active participation of youth in the development and political activities of the country. The package also has the capacity to answer questions of development and participation raised by the youth. This could be a New Year’s gift with potential opportunities as long as it is implemented at the level planned.

National youth policy (2004)

The National Youth Policy (NYP) of 2004 in Ethiopia was a significant step in addressing the engagement of youth in the country’s socio-political and economic development. Ayele et al. (2017) noted that the policy aimed to fill institutional and policy gaps that hindered youth participation in political democratization and economic growth. The policy specifically emphasized the importance of rural youth engagement by highlighting access to farm and grazing land, as well as encouraging participation in off-farm activities.

However, it is crucial to note that the policy lacked specific, achievable, and measurable targets, particularly in addressing youth unemployment and underemployment. As of 2004, approximately 67% of the unemployed population were youth, indicating a pressing need for concrete targets to reduce youth unemployment. Furthermore, the policy’s effectiveness in ensuring youth benefits was not adequately assessed through monitoring and evaluation reports, despite the indication of such measures within the policy framework, it is evident that the policy section could benefit from a more analytical approach, focusing on the historical context and subsequent attempts to improve youth employment and job creation in rural areas. This would involve highlighting the disconnect between the challenges outlined and the policy approaches implemented. Additionally, addressing the political context surrounding the policy’s inception, particularly in relation to the elections in 2005, would provide a more comprehensive understanding of the policy’s development and implementation. Despite the prevalence of these issues at the time, underscores the mismatch between the challenges and the policy’s implementation.

Furthermore, the policy’s emphasis on rural youth engagement, particularly in off-farm activities and access to land, did not fully account for the multifaceted nature of the challenges faced by rural youth. The policy’s failure to provide a comprehensive and targeted approach to address the specific needs of rural youth further exacerbates the mismatch between the challenges identified and the policy’s approaches.

National rural youth development package (2006)

This package necessitated the creation of separate development packages for urban and rural youth due to their distinctive characteristics. The NRYDP highlighted that unemployment and underemployment were the primary issues faced by rural youth, followed by a lack of recreational and sports facilities, as well as a dearth of platforms for discussing their concerns. It acknowledged that the unique political, social, and economic challenges confronted by young people had left them feeling hopeless and excluded. The NRYDP emphasized that unmet land demands and the absence of a government system ensuring integration of youth into the existing tenure system had rendered rural youth landless and despondent. The package admitted that government and societal attention towards youth had been limited. Consequently, the NRYDP primarily aims to address unemployment and underemployment issues by facilitating financial support and land access for young people. Unlike the NYP, the NRYDP proposes more specific strategies for obtaining resources to reduce underemployment and unemployment among rural youth.

The package outlines the following action plans to equip rural youth with the necessary resources to create their own employment opportunities: land access, non-farm businesses, finance, human capital, and market access. Additionally, it includes activities targeting social aspects such as health, education, and other social issues affecting rural youth. The package emphasizes the need for special attention from both the government and society towards young people, political participation, active involvement in social activities, freedom to organize and form unions, as well as encouraging youth to challenge corruption and mismanagement. Even if it lacks specificity on how much to reduce rural youth underemployment and unemployment and how to create jobs for rural youth, the packages recognized the unique difficulties faced by rural youth and explicitly specified the sources for obtaining crucial resources such as land and finance to address their concerns. Furthermore, they emphasized the importance of integrating youth issues throughout the government structure.

Rural job opportunity creation strategy (2017)

The Rural Job Opportunity Creation Strategy (RJOCS) released in 2017 is Ethiopia’s major policy document addressing rural youth unemployment. It aims to consolidate existing employment programmes and align them with broader development plans such as the second Growth and Transformation Plan. The Jobs Creation Commission established in 2018 is responsible for overseeing implementation of the RJOCS. The strategy recognizes rural areas’ untapped potential for creating youth jobs, both in agriculture and other sectors. It emphasizes generating opportunities for marginalized groups and promoting rural entrepreneurship linked to job creation. However, the strategy could be strengthened by more explicitly identifying employment opportunities in the growing agribusiness sector.

The RJOCS acknowledges that low agricultural productivity and negative perceptions of farming discourage rural youth. It thus promotes high-value crops, livestock, and improved technologies to boost competitiveness and attract youth. Private sector engagement is also seen as important for scaling successful projects and utilizing diverse resources. While green jobs and land rehabilitation present opportunities, skills training must align with these. Proper implementation is critical but has been hindered by limited local capacities. A holistic approach integrating capacity building, profitable ventures, and consideration of local contexts could help achieve the strategy’s goal of meaningful rural youth employment. Overall, the RJOCS lays out policies to remedy land access issues and generate rural jobs, but fully realizing its objectives requires coordinated, long-term efforts across multiple levels and sectors.

The Rural Job Opportunity Creation Strategy identified four main areas of focus – entrepreneurship, wage employment, livelihood diversification, and expanded public work programmes. It also recognized four critical inputs needed – land provision, financial support, technology transfer, and human capital development. However, there are challenges that could hinder its goals, such as a lack of knowledge among youth, insufficient support services, negative perceptions of agriculture, shortages of land and infrastructure, bottlenecks in national strategies, and financial constraints. To fully realize rural job creation, the strategy must address these challenges through coordinated efforts to change mindsets, improve access to resources, strengthen implementation, and boost agricultural competitiveness and productivity.

Youth revolving fund (2017)

This fund was approved on 10 March 2017 in Proclamation No. 995/2017. The proclamation dictated that the federal government should allot 10 billion ETB (427 million USD) to regional governments for the fund to serve as a permanent source of finance to assist youth in employing their capabilities in creating job opportunities. The target beneficiaries of the fund are youth (aged between 18 and 34 years old) both in urban and rural areas organized under micro and small enterprises. In addition to land and finance, the implementation strategy of the Fund dictated that technology and human resource development were critical inputs that should be supplied to the youth. Other related projects, programmes, and plans include the Agricultural Growth Program (AGP I and II), since 2011, Growth and Transformation Plan I (GTP-I), from 2011 to 2016, and Growth and Transformation Plan II (GTP-II), since 2016.

One of the main goals of AGP – II is to improve the commercialization of smallholder farmers and to strengthen common interest groups (CIGs) for women and youth. Additionally, it aims to enhance financial access to cooperatives and CIGs through capacity development and by strengthening rural saving and credit cooperation (RUSACCOs) by creating linkages among CIGs, microfinance institutions, and unions (Alebel et al., 2019). While GTP- I (2010/11–2014/15) was developed with an objective of establishing suitable conditions for sustainable nation building and economic growth to attain MDGs by focus on different pillars including promoting women and youth employment and equitable benefits. Moreover, it made some change on better participation of youth in the country economic development and political affairs. After taking lesson from the achievements of GTP- I, the GTP- II (2015/15–2019/20) aimed at ensuring rapid, sustainable and broad-based growth through enhancing productivity of agriculture and manufacturing by targeting youth included for the country to become a low middle-income country by 2025.

The Growth and Transformation Plan I (GTP- I), which was implemented from 2010/11 to 2014/15, aimed to establish favourable conditions for sustainable nation-building and economic growth in Ethiopia. The plan focused on various pillars, including promoting women’s and youth employment, as well as equitable benefits. It also sought to enhance the participation of youth in the country’s economic development and political affairs. Building on the achievements of GTP- I, the Growth and Transformation Plan II (GTP- II), implemented from 2015/16 to 2019/20, aimed to ensure rapid, sustainable, and broad-based growth in Ethiopia. The plan focused on enhancing the productivity of agriculture and manufacturing sectors by targeting youth. The ultimate goal was for Ethiopia to become a low middle-income country by 2025. Generally, there were several obstacles that hindered the creation of job opportunities for rural youth. These challenges included the absence of clearly indicated data and information about the employment status of young people, a lack of evidence regarding the effectiveness of policies and packages in rural areas, insufficient coordination in the implementation of initiatives, and limited access to financial services and land.

Conclusion and recommendations

Youth unemployment is one of the most serious socio-economic issues facing Ethiopia today. Despite economic growth and increased educational attainment over the past 15 years, the country has yet to see a significant positive impact on youth employment. The majority of Ethiopia’s youth, around 81%, live in rural areas where they face considerable challenges. Most rural youth share shrinking plots of family land with parents and other adults, resulting in insufficient land access over time. Compounding these difficulties, rural youth are disproportionately impacted by poverty and have limited job opportunities in areas with poor infrastructure, finance, markets, human capital, and restricted land access. These conditions in rural Ethiopia are the primary drivers of excessive unemployment and underemployment among youth. They also contribute to unabated out-migration to urban centres in search of work. While the Ethiopian government has recently developed some youth employment initiatives and policies to address these issues, earlier national policies faced constraints in effectiveness due to a lack of specific, measurable targets and insufficient consideration of challenges facing rural youth. Alleviating the pressing problems of rural youth unemployment and underemployment will require comprehensive policies that directly target the multifaceted barriers inhibiting their participation in Ethiopia’s development through job creation and skills training tailored to local needs and opportunities.

Ethiopia has implemented several policies aimed at addressing high youth unemployment, particularly in rural areas. The National Youth Policy of 2004 sought to increase youth participation in development and create an enabling environment for self-employment. Recognizing different challenges faced by rural and urban youth, the National Rural Youth Development Policy of 2006 specifically targeted rural unemployment. Key initiatives included cooperatives, communal land provision, and strengthened rural credit systems. The Rural Job Opportunity Creation Strategy of 2017 further sought to integrate rural employment goals into national development plans by supporting pastoral youth. Additionally, the government established a youth revolving fund to provide financial assistance to youth groups for self-employment. While helping to address capital constraints, this fund did little to solve issues of market access facing Ethiopia’s large rural youth population. More recent development plans such as the Growth and Transformation Plan II for 2016–2020 and the 2017 Rural Job Opportunity Creation Strategy also prioritize boosting youth employment. However, these policies have focused mainly on agriculture and supply-side interventions like skills training and entrepreneurship support, paying less attention to opportunities in industry and services (ILO, 2023).

Looking ahead, the insights gained from the review emphasize the urgency of formulating and implementing youth-related policies that specifically target rural youth unemployment. These policies should encompass provisions for enhancing educational and vocational opportunities, promoting entrepreneurship, and facilitating access to resources and employment in rural areas. Furthermore, continuous monitoring and evaluation of policy outcomes are essential to ensure that youth-related policies contribute meaningfully to the socio-economic development and inclusive growth of Ethiopia. Despite the progress made to tackle the rural youth unemployment, the unemployment rate of rural youth was being increased from time to time which causes for an increment of urban unemployment rate through rural-urban youth migrations. The review suggests the following implications for improving policies and practices on rural youth employment:

• Enhance vocational training programmes through developing and expanding vocational training programmes tailored to the needs of rural youth, providing them with relevant skills and knowledge that align with local labour market demands.

• Enhancing strategies that make ICTs accessible and affordable for rural youth could help improve information and market access and also attract more youth to engage in agricultural value chains.

• Strengthen entrepreneurship support for rural youth with diverse mechanisms to address the multidimensional constraints that rural youth face in their endeavours towards entrepreneurship and competing in business.

• Encouraging diverse and context-specific interventions by identifying profitable value chains that consider the aspirations and interests of rural youth and combine access to resources, skills development, mentorship, and business networks.

• Investing in human capital, particularly early childhood education, to develop high-order cognitive and socio-behavioural skills in addition to foundational skills.

• Encouraging and enhancing the enthusiasm of youth people living in rural areas to form various social groups and social networks.

• Boost policy coordination and implementation that support self-employment opportunities in off-farm activities such as value chain development, agricultural service provision, and agribusiness activities.

Disclosure statement

No potential conflict of interest was reported by the author(s).