Employment Creation Potential for Youth of Growth Sectors in the Kenyan Economy

Despite Kenya’s strong economic growth, expansion of employment in the formal sector has been slow over the last two decades. There has been limited structural change in the composition of recorded employment and the share of the informal sector remained at nearly 83 per cent of total employment in the last two decades. Further, although the country has implemented various policy interventions to address youth employment, the interventions have not resulted into adequate job creation in various sectors for the youth. This policy brief provides an evaluation of the sectors with high potential of creating employment opportunities for the youths in Kenya using an Input – Output approach which was based on the 2015 Social Accounting Matrix (SAM). We find that agriculture, transport; trade, construction and education have the highest potential to create jobs for the youth. The agriculture sector has the highest employment multipliers in which livestock, vegetables (horticulture), rice production value chains have the greatest potential to create jobs. We also find that economic sectors in Kenya are interdependent such that expansion of one sector has backward and forward linkages with the other sectors. It is therefore important to adopt a comprehensive multisectoral approach in job creation strategy for the country. Indeed, economic activities vary across counties hence need to stimulate activities where each County and economic bloc has comparative advantage to ensure sustained job creation for the youth.