“This paper examines labor diversification in Ethiopia, focusing on youth, and explores current conditions that youth
face in both the agricultural and non-farm labor markets. Using data from the Ethiopia Socioeconomic Survey (ESS) and the National Labor Force Survey (NLFS), we explore current trends in labor diversification, along with youth non-farm
engagement in rural and small towns. We find that youth (ages 25 to 34 years) have a greater probability of working in nonfarm enterprises compared to mature individuals (age 35-64). However, wage labor opportunities remain scant in rural
Ethiopia. The majority of individuals working in non-farm employment are engaged in small-scale trade activities.
Our analysis suggests that push factors are at play with regards to non-farm diversification, whereby those that live in less favorable agricultural potential areas with fewer assets, such as livestock, and less access to agricultural credit are more likely to seek off-farm work. While this research provides evidence that selected youth are engaged in off-farm labor opportunities, however, a low proportion of the rural population, including youth, has diversified into other activities outside of agriculture. Low demand for higher-skilled labor remains a major obstacle to achieving structural transformation in Ethiopia in
the near to medium term.”
