Impact of youth unemployment in Ethiopia during COVID-19 Lockdowns: Case study Arsi-Zone, Ethiopia
This study analyzes the drivers of self-employment versus paid employment and the consequences of youth unemployment in Ethiopia's Arsi Zone during the COVID-19 lockdowns using Propensity Score Matching and Structural Equation Modeling to inform targeted government interventions.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
The Big Picture: A Traffic Jam in Arsi
Imagine the economy of Arsi Zone in Ethiopia as a massive highway. The goal is to get everyone who wants to work (the drivers) into a moving car (a job). However, during the COVID-19 lockdowns, the highway got clogged. The study by Alemayehu Derege looks at why so many young people are stuck in traffic, unable to find a ride, and what happens to them while they wait.
The study focuses on Arsi Zone, a place with a huge population of young people but not enough cars (jobs) to go around. The researcher used a mix of surveys, interviews, and statistical "detective work" to figure out who gets a job, who starts their own business, and who gets left behind.
The Two Main Paths: The "Employee" vs. The "Entrepreneur"
The study found that young people generally try to take one of two paths to escape unemployment:
- The "Paid Job" Path (The Commuter): These are young people looking for a steady paycheck, like someone waiting for a bus.
- Who gets on the bus? Usually, older people, those with more experience, and those with higher education.
- The Catch: The bus is very crowded. Highly educated people often wait the longest because they are picky; they want a "good" seat (a secure, high-paying job) and refuse to sit in the back. They are like passengers waiting for a luxury coach that rarely arrives.
- The "Self-Employment" Path (The Taxi Driver): These are young people trying to start their own small businesses.
- Who drives the taxi? People with specific personal skills, those who are married, and people living in cities.
- The Catch: They are stuck in the garage because they have no gas money. The study found that 64% of people who wanted to start a business couldn't do it simply because they lacked the cash to buy the car or fuel (financial resources). Banks were too strict, especially during the pandemic.
The "Behavior" Factor: It's Not Just About Grades
The researcher discovered that your personality and habits are just as important as your diploma. They grouped the youth into three "types":
- The "Grade A" Perfectionists: These are the hard workers who want a safe, routine job. They are risk-averse. They wait a long time for a paid job.
- The "Grade B" Business Minds: These are the confident, creative types who are willing to take risks. They find self-employment much faster.
- The "Grade C" Politicians: Surprisingly, the study found that young people with a "political mentality" (who are bold, talkative, and good at networking) actually found jobs four times faster than the best academic students. It's like knowing the right person at the bus station gets you on the bus before the person with the perfect ticket.
The Cost of Waiting: The "Health" and "Crime" Toll
When you are stuck in traffic for too long, things start to go wrong. The study measured the "cost" of unemployment:
- The Mental Health Toll: Being unemployed is like a slow-acting poison. The study found that unemployed youth are much more likely to suffer from depression, anxiety, and addiction. It's like being stuck in a dark room; eventually, your mood and health deteriorate. Unemployed people were 20% more likely to end up in the hospital for health issues than those with jobs.
- The Crime Toll: When people are desperate and have no money, they might try to "steal a ride." The study found that unemployment pushes some youth toward crime (theft, gambling, etc.) just to survive. However, there's a twist: people who do have jobs sometimes commit crimes too, but for a different reason. They might be underpaid or feel the system is unfair, so they look for "side hustles" (sometimes illegal ones) to boost their income.
The Money Gap
The study did the math on the lost money.
- An unemployed person loses about 260 Ethiopian Birr per month compared to someone with a job.
- If you multiply this by the thousands of unemployed youth in Arsi, the zone is losing about 34 million Birr a year. It's like a factory that could be producing millions of dollars worth of goods but is sitting idle because the workers have nowhere to work.
The Solution: What the Study Suggests
The researcher suggests that fixing this traffic jam requires more than just waiting for the economy to get better. Here are the proposed fixes:
- Fuel for the Taxi Drivers: The government needs to create special loan programs for young people who want to start businesses but don't have collateral (like a house to pledge). They need "gas money" to get started.
- Different Training for Different Drivers: Universities should focus on training the "Grade A" students for high-level jobs, but vocational schools should train the "Grade B" and "C" students to be practical entrepreneurs and skilled workers.
- Clear the Roadblocks: Corruption and "facilitation fees" (bribes) are blocking the road. The study says the government must stop these unfair practices so that jobs go to the most capable people, not the ones who can pay the most bribes.
- Family and Community: Parents need to encourage their children to be flexible. If a paid job isn't available, starting a small business is a valid and necessary alternative.
The Bottom Line
The paper concludes that unemployment in Arsi isn't just about a lack of jobs; it's a mix of economic shortages, lack of startup cash, corruption, and personal mindset. The lockdowns made a bad situation worse, but the solution lies in helping young people start their own businesses, cleaning up the hiring process, and training them with the right skills for the real world, not just the classroom.
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