Ethiopia has registered one of the highest growths in Africa in the past two decades. Despite this high and continuous economic growth, which is above the Sub-Saharan average, for a decade and half, unemployment in general and youth unemployment in particular remained a major challenge. This study examined this paradox using three approaches: (i) a growth decomposition and structural change analysis, (ii) an examination of the sectoral and sub-sectoral mode of production in terms of capital and labour ratio that is based on social accounting matrix (SAM) and enterprises survey data, a SAM based economy-wide model, as well as (iii) by estimating an econometric model that attempts to identify major determinants of unemployment (youth unemployment).
