Challenges and Prospects of Entrepreneurship Development and Job Creation for Unemployed Youth: Evidence from Addis Ababa and DireDawa City Administrations, Ethiopia

Almost 90 percent of the world’s youth are residents in countries where they can hardly access adequate education, capital, paid employment and health services. As the size of the younger population in Africa steadily swells to account to being the single largest category of age groups, the likelihood of majority of these youth being absorbed within the formal economy becomes nearly nonexistent. More than half of the population in Ethiopia is made up of young people under the age of 25. In addition, women constitute slightly more than half the population of Ethiopia. This greater number of youth and women who are mostly engaged in the informal sector to earn their living makes them vulnerable to conditions that deprive them from securing material well-being. Based on the results of the study, the major factors that contribute to the youth being self-employed are the following: age of the youth, educational status of the youth, youth access to telecom services and social capital of an individual. In view of the above conclusions, the following policy recommendations are made: Improve the governance and attractiveness of TVET; Improve the quality of teaching and learning at school; Support village level associations: to enhance the chances for better development of entrepreneurial activity and increase communication outlets.