The Challenge of Unemployment and Youth Unemployment amidst Fast Economic Growth in Ethiopia

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).