COLLEGE OF NATURAL AND COMPUTATIONAL SCIENCES

DEPARTMENT OF STATISTICS

DEMOGRAPHIC AND SOCIO-ECONOMIC DETERMINANTS

OF YOUTH EMPLOYMENT STATUS IN DIRE DAWA TOWN,

IN CASE OF SABIAN (02) KEBELE

BY

KEDIR MEKONIN ID NO: R/0608/07

KEBRON DEREJE ID NO: R/0604/07

ADVISOR: - DEREJE T. (M.Sc.)

SUBMITTED:-DEPARTMENT OF STATISTICS

MAY, 2017

DIRE DAWA, ETHIOPIA

 APPROVAL SHEET

DIRE DAWA UNIVERSITY

SCHOOL OF NATURAL AND COMPUTATIONAL SCIENCES

DEPARTMENT OF STATISTICS

DEMOGRAPHIC AND SOCIO-ECONOMIC DETERMINANTS

OF YOUTH UNEMPLOYMENT IN DIRE DAWA TOWN

IN CASE OF SABIAN (02) KEBELE

BY

KEDIR MEKONIN ID NO: R/0608/07

KEBRON DEREJE ID NO: R/0604/07

APPROVED BY:

______________________ _______________ _______________

Name of Advisor Signature Date

_____________________ _______________ ______________

Name of Examiner Signature Date

____________________ _______________ ______________

Department Head Signature Date

ACRONYMS AND ABREVIATIONS

UNFPA----------------------------------United Nations Population Fund

MDG ------------------------------------ Millennium Development Goals

MOY------------------------------------ -Ministry of Youth Sport and Culture

WB ------------------------------------- -World Bank

MOLSA---------------------------------- Ministry of Labor and Social Affairs

GTZ ---------------------------------------German Technical Corporation (Zusammenarbei)

ILO -----------------------------------------International Labor Organization

CSA -----------------------------------------Central Statistical Agency

UN--------------------------------------------United Nations

UNODC --------------------------------------United Nations Office on Drugs and Crime

UNAIDS --------------------------------------United Nations Program on HIV/AIDS

SCB -----------------------------------------Sabian Communication Biro 2009

ABSTRACT

DEMOGRAPHIC AND SOCIO-ECONOMIC DETERMINANTS OF YOUTH

UNEMPLOYMENT IN DIRE DAWA TOWN, IN CASE OF SABIAN (02) KEBELE,
LOGISTIC REGRESSION MODEL ANALYSIS

KEDIR MEKONIN (kedirmokonin22@yahoo.com or kedirmokonin2008@gmail.com )

KEBRON DEREJE

DIRE DAWA UNIVERSITY, 2017

A high level of youth unemployment is one of the critical socio-economic problems facing
Ethiopia. The intensity of the problem is high in urban areas in general, Dire Dawa Sabian (02)
kebele in particular where youth face serious difficulty in getting employment. In light of this
problem, this study is conducted with an objective of examining the demographic and socio
-economic determinants of youth unemployment. Primary data collected from 137 youths
randomly selected and dropping questionnaires from home to home, that depending on data we
get from that kebele, their house number and phone number from the Sabian (02) kebele of Dire
Dawa town, are used for the study. Simple frequencies, cross tabulation and binary logistic
regression model were used to analyze the data. Among all the respondents, 45.3 percent were
found unemployed, while 54.7 percent were employed at the time of the study. The logistic
regression analysis was performed to investigate the effect of each predicator variable on the
unemployment status of youth. Accordingly, sex, educational level, marital status, work
experience, family income, job preference and access to business advisory services were found
to be the significant determinants for youth unemployment in Sabian (02) kebele. Age
difference, family education level, exposure to any mass media and social network density were
found insignificantly related to youth unemployment. Based on the findings of the study
encourage youth to improve their education, empower females and increase their participation,
encourage youth to increase their work experience, and improve youth attitudes towards jobs in
the formal sectors were suggested as recommendations.
ACKNOWLEDGMENT

First and for most we would like to express our deepest gratitude to the almighty “ALLAH” for
success who initiated to begin and who enable to accomplish everything and strength to advance
our dream to this FIRST SUCCESS. Next to ALLAH, we would like to thank our family for
their prayers, continuous financial and moral support throughout the course of the study.

We would like to express the deepest gratitude to Mr. Dereje Taffesse (MSc.), our research
advisor for his invaluable and constructive comments and suggestions throughout our study.
Without his professional assistance and guidance this study would not be realized.

Our deep appreciation is extended to Mr. Bedasa Tesamma (MSc.), our Examiner and Head
Department of Statistics; for his irreplaceable comments and suggestions that contributed to the
successful comprehension of the study. I also thank my best friend, Biniam Esayas for allowing
me to use his Laptop computer throughout the course of the research.

Finally and yet importantly, our heart-felt thanks go to our best friends, Muhammad and Tariku
Kebede for their cooperation during the time of data collection and we are grateful to those
individuals who contribute to the completion of this study.
Table of Contents
ABSTRACT................................................................................................................................................4
ACKNOWLEDGMENT.............................................................................................................................5
CHAPTER ONE..........................................................................................................................................7
INTRODUCTION.......................................................................................................................................7
1.1 Back ground of the Study..................................................................................................................7
1.1.1 Global Perspectives....................................................................................................................7
1.1.2 National Perspectives..................................................................................................................9
1.2 Statement of the Problem.................................................................................................................12
1.3 Objectives of the Study....................................................................................................................15
1. 3.1 General objectives of the study................................................................................................15
1.3. 2 Specific objectives of the study................................................................................................15
1.4 Significance of the Study.................................................................................................................15
1.5. Scope of the study...........................................................................................................................16
1.6 Limitations of the Study..................................................................................................................16
CHAPTER TWO.......................................................................................................................................18
REVIEW OF RELATED LITERATURE.................................................................................................18
2.1 Theories of Unemployment.............................................................................................................18
2.1.1 Human Capital Theory..............................................................................................................18
2.1.2Social Capital Theory................................................................................................................18
2.1.3 The Job-Matching Theory.........................................................................................................19
2.1.4 The Theory of Job Search.........................................................................................................19
2.2 Factors of Youth Unemployment.....................................................................................................19
2.2.1 Demographic Factors of Youth Unemployment.......................................................................20
2.2.2 Socio-Economic Factors of Youth Unemployment...................................................................21
2.3 Consequences of Youth Unemployment..........................................................................................26
2.3.1 Unemployment fosters drug addictions among youths.............................................................26
2.3.2 Youth unemployment contributes to crime and violence..........................................................26
2.3.3 Unemployment results in psycho-social problem on youth.......................................................27
2.3.4 Economic costs of unemployment............................................................................................27
2.4. Conceptual Framework...................................................................................................................28
CHAPTER THREE...................................................................................................................................29
RESEARCH METHODOLOY.................................................................................................................29
 3.1 Description of the study Area....................................................................................................29
3.2. Source of Data................................................................................................................................29
3.3. Method of data collection...............................................................................................................30
3.3.1 Measurement Tools...................................................................................................................30
3.3.2 Field Work................................................................................................................................30
3.4. Study variables...............................................................................................................................30
3.4.1 Dependent Variable..................................................................................................................30
3.4.2 Independent Variables..............................................................................................................31
3.5. Designs of the study........................................................................................................................33
3.5.1. Sampling design and sampling techniques...............................................................................33
3.5.2. Sample size determination.......................................................................................................33
3.6. Method of data analysis..................................................................................................................35
3.6.1. Descriptive statistics................................................................................................................35
3.6.2. Inferential statistics..................................................................................................................35
3.6.3. The Chi-square test of independence.......................................................................................35
3.6.4. Logistic regression model........................................................................................................37
3.4 .1.Assumptions of logistic regression..........................................................................................38
3.4.2. Binary Logistic Regressions....................................................................................................39
3.5. The Model Specification.................................................................................................................40
3.5.1. Parameter Estimation and Testing............................................................................................41
3.6. Model diagnostics and checking.....................................................................................................43
3.6.1. Goodness of fit for logistic regression.....................................................................................43
3.6.2. The likelihood ratio test...........................................................................................................44
3.6.3 The Hosmer and Lemeshow Test Statistic................................................................................45
3.7. Tests of individual Predictor...........................................................................................................46
3.7.1. The Wald Test..........................................................................................................................46
3.8. Logistic Regression Diagnostics.....................................................................................................47
3.8.1 Residuals Analysis....................................................................................................................47
3.8.2 Influential Statistics..................................................................................................................48
CHAPTER FOUR.....................................................................................................................................50
STATISTICAL DATA ANALYSIS.........................................................................................................50
4.1 Summary of descriptive statistics....................................................................................................50
 4.2 Chi-square test of association between Youth Employment status and socio-economic and
demographic variable in Sabian 02 Kebele............................................................................................58
4.3. Determinants of Youth Unemployment in the Sabian (02) kebele..................................................62
4.3.1. Binary logistic Analysis...........................................................................................................62
CHAPTER 5..............................................................................................................................................73
DISCUSSION, CONCLUSION AND RECOMMENDATION................................................................73
5.1 Discussion.......................................................................................................................................73
5.2 Conclusions.....................................................................................................................................75
5.3. Recommendations..........................................................................................................................76
References.................................................................................................................................................78
APPENDIX-A...........................................................................................................................................80
CHAPTER ONE

INTRODUCTION

1.1 Back ground of the Study

1.1.1 Global Perspectives

Youth is the time of life full of promise, aspiration and energy. Young men and women are most
eager to strike out to secure their futures and to contribute to their families, communities and
societies (ILO, 2008). They bring with them numerous assets: relevant and recent education and
training; enthusiasm, hope and new ideas; willingness to learn and be taught; openness to new
skills and technology; realistic expectations on entry into the labor market; mobility and
adaptability; and represent a new generation to meet the challenge in countries with an ageing
work force (Morris, 2006). The energy, skills and aspirations of young people are invaluable
assets for sustainable development of a nation (WB, 2009).

Globally, the number of young people is about to become the largest in history relative to the
adult population. According to UNFPA (2002), more than 50percent of the population is under
the age of 25. In terms of youth alone (age 15 –24), there are over 1.3 billion youth in the world
today. The majorities (almost 85percent) of the world’s youth live in developing countries, with
approximately 60percent in Asia; 23 percent in Africa, Latin America and the Caribbean, and the
number of youth living in developing countries will grow to 89.5 percent by 2025.

Youth are the world’s greatest asset for the present and future, but they also represent a group
with serious vulnerabilities. In this regard, ILO (2004) confirmed that increasing global
unemployment has hit young people hard and today’s youths are facing high levels of economic
and social uncertainty. Besides, the recent ILO (2010) report showed that there were an
estimated 81 million unemployed young people in the world and the rate of unemployment rose
from11.9 to 13.0 percent at the end of 2009. This rate of youth unemployment is the outcome of
various social, economic and demographic factors (Hassen, 2005).

A research conducted by Morris (2006) and Salvador and Killinger (2008) found that lack of
experience, mismatch between their skills and the demands of labor markets, inadequate
information and counseling, less access to resources and services, discrimination on the basis of
age, sex, ethnicity, health, family economic status, attitudes of youth towards jobs and other
factors are common barriers of youth in finding employment. These factors hindered young
people in finding employment, results the depreciation of human capital and deterioration of
youth employment prospects, which could lead to social exclusion (Berhanu et al. 2005).This
implies that youth have been largely neglected in the national development strategies of states
(WB, 2009).

Improving the employment status of youth have been key concerns of several international
summits and conferences since the late 1990’s. Youth unemployment represents growing
concerns worldwide. It becomes an important priority area on the political agenda of several
states as well as of bilateral and multilateral development agencies (GTZ, 2006). The 1995
Copenhagen declaration on Social Development and Programme of Action of the World Summit
for Social Development called for special attention to youth employment. The United Nations
Millennium declaration also adopted a commitment to “develop and implement strategies that
give young people everywhere a real chance to find decent and productive work” (Morris, 2006).
However, such strategies are designed; youth still suffer a lot due to unemployment.

In most countries, whether industrialized, developing or in transition, young people suffer from
low access to the labor market than the adult (Mlatsheni and Rospabe, 2002). The relative
disadvantage of youth is more pronounced in developing countries, where they make up a
strikingly higher proportion of the labor force than in developed countries. Eighty-five percent of
the world’s youth live in developing countries and are 4.1 times more likely to be unemployed
than adults, as compared to 2.3 times in industrialized economies (ILO, 2004). The high
unemployment ratio indicating that job opportunities are not expanding fast enough to keep pace
with growth of the labor force, and young people do not have the education and skills required to
meet labor market demands (ILO, 2007).

The employment situation of Africans youth, particularly the Sub-Saharan Africa, is serious and
challenges their livelihood (ILO, 2003). In the region, young people aged 15–24 account for 36
percent of the working-age population, but accessing employment is very low (Guarcello and
Rosati, 2007). The rates of growth of employment opportunities were inadequate to absorb the
growing young population. Failure to address youth employment issues will have serious
consequences for the economy and society (Odhiambo, 2006).

1.1.2 National Perspectives

Ethiopia has witnessed rapid population growth in recent decades. The population was estimated
to be about 74 million people in 2007 (CSA, 2008), making Ethiopia the second most populous
country in Sub Sahara Africa. The proportion of young people in the overall population has
increased over the last two decades. The young cohort represented about 14 percent of the
population in 1984 and 20percent of the population in 2001 (Guarcello and Rosati, 2007). In
2007, the youth population accounted for 28.3 percent of the total population and 39.6 percent of
urban population of the country (CSA, 2008).

In Ethiopia, the labor force grows with an increasing proportion of youth; employment growth is
inadequate to absorb the new entrants in the various sectors of the economy (Guarcello and
Rosati, 2007). The country has one of the highest urban unemployment rates worldwide, at about
50 percent of the youth labor force (Berhanu et al, 2005). Thus, lack of employment
opportunities for young people is among the critical development challenges facing the country
(Guarcello and Rosati, 2007).

Dire Dawa is one of the Administrative cities with a total population of 387,000, Out of the total
populations of the city having 138,067 Active youth populations , from this, having 64,391
female and 73,676 male were youth whose age is between (15-64) in 2007(CSA, 2010).

On the other hand, employment status of youth in the City showed that youth unemployment rate
was estimated about 24.1 %( 33053) out of working age groups, having 9 %( 12,081) of males
and 15.2% (20,972) of females in 2010 (CSA, 2010 Dire Dawa Branch). And also when we
categorize as their age 15-19 there is total of 9,633 youth, out of this 1,359 male were
unemployed and 1,943 females are unemployed. From age 20-24 there is 2,223 unemployed
male and 4,351 female are unemployed from total youth 2, 1303 whose age is 20-24.From age
25-29 there are 3125 male unemployed and 4183 female unemployed from the total youth of
30,393 whose age is 25-29.
In the context of Dire Dawa, all persons aged fifty years and over who were productively
engaged or available to be engaged during the reference period were included as economically
active persons. In other words, the economically active population comprises all persons aged
fifty years and over who were employed or unemployed in the reference period. The
complements, i.e., those who were neither engaged nor furnish their labour constitute the
economically inactive population. (Central Statistical Agency, 2012 Dire Dawa Branch).

The lack of employment opportunities for Dire Dawa young people is among the critical
development challenges facing by the city and a key barrier to national efforts towards the
achievement of the Millennium Development Goals.

Dire Dawa offices are responsible to create job opportunities by opening the Small and Micro
Enterprises (SMEs) for those youth, but not only in government offices but also in various NGOs
and private organizations. Thus, it is our duty to utilize the opportunity unless it will be a time
bomb blast at one time in future which can completely distract the social, political and
economical stability of the city. Even though it is primarily the government’s responsibility to
address the issue of unemployment, the society should play their parts in the efforts being taken
by the government as they will be the main victims of unemployment which ultimately results in
poverty. Meanwhile, the city higher officials need to intensively work on entrepreneurship and
job creation for the targeted portion of the society (youth).Even though it is not sufficient
enough, the Dire Dawa government office is working hard to open suitable ground for youth
entrepreneurship through crafting and implementing a sound policy to bind youth under Small
and Micro Enterprises (SMEs) (CSA Branch in Dire Dawa 2009 E.C we ask Orally).

Cognizant to this, Ethiopia approved its youth policy in 2004. The overall goal of the National
Youth Policy is “to bring about the active participation of youth in the building of a democratic
system and good governance as well as in the economic, social and cultural activities in an
organized manner and to enable them to fairly benefit from the results” (MOY, 2004).

Sabian is one of the kebele in Dire Dawa City Administration with a total population of 69,537.
Out of this population, 65(45,200) percent were youth (Sabian Communication Biro, 2006). Like
other kebele of the City, Sabian also manifests the problem of youth unemployment.
Youth unemployment rate was found 26.2 percent(11,568) of working age groups,
having11.2percent (5,422)male and 14.9(6,146) percent female (Sabian Communication Biro,
2006). The facts displayed that youth population is one of the segments of the kebele population
affected by the problem.

Improving the employment status of youth could lead to the achievement of MDGs through
identifying the factors that hindered the young people in getting employment. Similarly, WB
(2009) noted that helping youth to realize their full potential by gaining access to employment is
a precondition for poverty eradication, sustainable development, and lasting peace. But in case of
this kebele, to achieve this goal government must take some action to decrease unemployment
problem in this kebele.

Despite some improvements in recent years by Grouping Youth into one to five (1-5) groups to
create a job by giving some what is called Business Advising service and make small micro
Enterprise for students to decrease rate of unemployment, but still a high level of unemployment
continues to be a serious social problem and major policy challenge facing this Sabian kebele
(Sabian communication Biro, 2009).

Given the aforementioned youth employment scenario of the time and the current situation in
Ethiopia, the study, attempted to explain the determinants of youth unemployment on the basis of
data collected from Dire Dawa town, Sabian (02) kebele.

Finally, it is better to inquire why prevalence of unemployment is high in the kebele and is that
because the number of youth and job creation rate is mismatched or any other factors are
influencing? And how government is working on entrepreneurship, how youth are benefiting
from the policy direction needs to be investigated.
1.2 Statement of the Problem

Unemployment is a serious socio-economic problem facing all age groups of population.

However, youth unemployment is higher than adults. Strengthening this point, ILO (2004) report
indicated that youth in developing countries are 4.1 times more likely to be unemployed than
adults. This shows that it is becoming increasingly difficult for young entrants to find jobs in the
labor market (Schiefebei and Farrel, 2003).

Moreover, ILO (2010) forecasts a continued increase in global youth unemployment to an all
time high with a rate of 13.1 percent in 2010, followed by a moderate decline in 2011. This rate
of youth unemployment has been recognized as one of the most serious barriers to economic and
social development in many developing and developed countries (GTZ, 2010).

Currently, youth employment is a critical concern to almost every country in the world. It is one
of the most pressing economic and social problems confronting developing countries whose
labor markets have weakened substantially (Bell and Blanchfl, 2010).

According to ILO (2007) estimates, the Sub-Saharan Africa region has the highest rate of youth
unemployment (18.4 percent) after the Middle East and North Africa (21.3 percent). A research
conducted by Fadayomi (2000) shows that urban unemployment is higher than rural
unemployment in the region. If this trend persists, it will have considerable effects on human
capital, as well as on the region’s economic potential (Berhanu et al, 2005). Thus, youth
unemployment has increasingly come to be recognized as one of the critical development
challenge confronting many countries in the continent (Curtain, 2000).

A research conducted by Morris (2006) and Salvador and Killinger (2008) found that lack of
experience, mismatch between their skills and the demands of labor markets, inadequate
information and counseling, less access to resources and services, discrimination on the basis of
age, sex, ethnicity, health, family economic status, attitudes of youth towards jobs and other
factors are common barriers of youth in finding employment

Analysis of the factors associated with youth unemployment indicated that the social and
demographic characteristics of individuals such as educational level, work experience, lack of
employable skills, sex, migration, family economic status are associated with youth employment
status (Toit, 2003).

Another study conducted by Venatus and Agnes (2010) in Nigeria shows that females, less
educated youth, young people from low income family, migrant youth constituted the highest
proportion of unemployed persons.

The employment situation of youth in Ethiopia is worst, particularly those who reside in urban
areas (Berhanu et al, 2005). According to Guracello and Rosati (2007), youth in urban areas face
a high rate of unemployment (almost 20percent). They encounter more difficulty in finding wage
jobs and employment in the formal sectors of the economy or engaged in self employment.
Confirming to this, youth unemployment rate in urban areas of the country, was found
24.5percent in 2010 (CSA, 2010).

The high rate youth unemployment is among the critical development challenges facing the
country, and a key barrier to national efforts toward achieving the MDGs (Guracello and Rosati,
2007). In spite of the pressing youth employment challenge, youth issues were given only limited
attention in the development policies of the country in the past (Berhanu et al, 2005).
Considering the existing high youth unemployment rate, recently, the government has started
new initiatives to reduce the problem through fostering entrepreneurship, and by increasing
youth participation in the development activities of the country (MOY, 2004).

Youth in urban areas of the Dire Dawa city Administration had limited access to employment
opportunities. According to CSA (2012) estimate, the rate of youth unemployment in urban areas
of the town was found 22.7% in 2012. This implies that youth in urban areas of the Dire Dawa
city were less employed in the various socioeconomic sectors of the region economy.

Sabian is one of the kebele in Dire Dawa City Administration with a total population of 69,537.
Out of this population, 65(45,200) percent were youth (Sabian Communication Biro, 2006). Like
other kebele of the City, Sabian also manifests the problem of youth unemployment.

Youth unemployment rate was found 26.2 percent(11,568) of working age groups,
having11.2percent (5422)male and 14.9(6146) percent female (Sabian Communication Biro,
2006). The facts displayed that youth population is one of the segments of the town population
affected by the problem.

Despite some improvements in recent years by Grouping Youth into one to five (1-5) groups to
create a job by giving some Business Advising service and make small micro Enterprise for
students to decrease rate of unemployment, but still a high level of unemployment continues to
be a serious social problem and major policy challenge facing this kebele (Sabian
communication Biro, 2009).While the labor force grows, employment growth is inadequate to
absorb labor market entrants. In this context, a much better understanding of youth
unemployment in this kebele and the functioning in Sabian labor markets, and forwarding key
policy implications is of a great importance. That is why the issue, youth unemployment in this
kebele, has become the concern of our research. However, majority of the researches that have
been done so far tends to concentrate on the incidence of unemployment at country level
(aggregate of rural and urban) or in specific population categories(like women), usually urban
youth or women unemployment; others consider unemployment problem in a particular urban
area , and thus it is quite rare to find recent works that attempt to holistically deal the issue of
unemployment at specific kebele level integrating it with labor market, and efforts and
challenges of employment creation.

While these general facts are clear, the specific factors affecting youth employment in the kebele
have received little research attention. The determinants of youth unemployment in the kebele so
far was not well assessed. In this stand, this study was conducted to examine demographic and
socio-economic determinants of youth unemployment in the study area. Consequently, the
results provide information for designing relevant program and strategy to reduce the problem of
youth unemployment in the study area. This in turn will have a far reaching implication for youth
as well as the achievement of MDGs.

Thus, this research can address the following research question:-

1. What are the socio-economic and demographic variables that determine youth
unemployment in the selected kebele?
2. Which variable mostly leads youth to be Unemployment in the selected kebele?
 3. How many percentage of male and female are Unemployed in selected kebele?

1.3 Objectives of the Study

1. 3.1 General objectives of the study

The general objective of the study is to identify and describe (examine) the factors that
contribute for youth unemployment in the study area.

1.3. 2 Specific objectives of the study

The specific objectives of the study are:-

1. Examine the effects of variations in demographic characteristics on employment status of

youths in Sabian (02) kebele.

2. Identify the significant factors that lead youth unemployment in the study area.

3. Examine and describe the socio-economic factors associated with youth unemployment in
Sabian (02) kebele.

4. Determine unemployment rate (percentage) for male and female youth in selected kebele.

5. Test association between work experience of youth and that of employments status.

1.4 Significance of the Study

Unemployment among youths has been a serious socio-economic problem in Ethiopia in general
and in Dire Dawa in particular. Previous studies have been attempted to explain the level of
youth unemployment rather than addressing the specific factors affecting youth employment. In
examinining the factors that affect employment opportunities of the young people, this study is
different from other studies conducted so far. The study attempts to address factors that
contribute for the high youth unemployment. Thus,
1. Though the study is confined to a single kebele, its findings will be helpful for better
understanding of the determinants of youth unemployment in the country in general and of the
study area in particular.

2. It shed some light on the nature and extent of the problem associated with high level of young
people unemployment.

3. The result is also expected to be helpful for the formulation of policies and strategies that
facilitate the reduction of youth unemployment and give information to concerned body.

4. The finding will also helpful in order to conduct further studies on the issue.

1.5. Scope of the study

Unemployment is the key problem of youths in Ethiopia in general and specifically in Dire Dawa
town the number of unemployment increases from time to time. But this study has been focused
mainly on Sabian (02) kebele youth unemployment situation, because to cover the over all areas
of the town there are numbers constraints such as lack of enough time and budget constraint.
Thus study would focus on the determinants of youth unemployment in Sabian (02) kebele.

1.6 Limitations of the Study

In spite of the fact that effort have been made to control the quality of the data, the following
limitations were encountered in this study.

1. Due to lack of willingness, some respondents were not given accurate information on some
socio-economic characteristics such as household income.

2. Examining the determinants of youth unemployment is difficult as it is the collective effect of

different factors. Youths are different in their socioeconomic and demographic status. This
requires the consideration of large sample size. However, due to limited resources, the study was
restricted to only 137 youths. The result may not be generalizable to the whole youth population,
though it can show the determinants of youth unemployment in the study area and serve as a
stepping stone for future study.
3. Secondary data that we get from Sabian kebele have some error on recording the house
number of youth and their phone number. When we go to their home by the secondary data we
get from Sabian kebele ,the respondent we want is not found on that place and so we leave it and
search another respondent by consuming our time and costs. Such like problem can make to
collect data takes much time and we take small sample size but this research can need at least
large sample size.
CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Theories of Unemployment

The relationship between a job and an individual is expressed by different theories.

This section reviews some of the theories that express job-individual relationships.

2.1.1 Human Capital Theory

According to this theory, education is considered as an important asset for economic

development as well as securing decent and productive job. Schultz (2002) noted that education
plays a great and significant role in the economy of a nation. It increases the productivity and
efficiency of people by increasing the level of cognitive stock of economically productive human
capability which is a product of innate abilities and investment in human beings. He further
illustrated that education increases the chances of employment in the labor market, allows people
to reap pecuniary and non-pecuniary returns and gives them opportunities for job mobility, and
leads to greater output for society and enhanced earnings for the individual worker. He
furthermore, stated that higher education provides the skills needed to perform complex jobs,
making people more productive, thus sustaining economic growth. People with the most human
capital are said to be the most productive, and thus secure the best jobs and the highest salaries.
Thus, education plays an important role in determining the employment status of an individual.

2.1.2Social Capital Theory

Social capital approach focused on the strength of the social tie used by a person in the process
of finding a job.(Granovetter (2004)) states that strong ties or social networks among people are
frequent, emotionally intense ties with friends, advisors and co-workers. The information
possessed by any member of this circle is quickly shared with the other members. He also noted
that weak ties are infrequent, not emotionally intense, and restricted to one narrow type of
relationship. Individuals with weak ties will be deprived of information from distant parts of the
social system and will be confined to the provincial news and views of their close friends. Thus,
individuals with weak ties could miss job opportunities available through social networks.

2.1.3 The Job-Matching Theory

The Job-matching theory is based on the idea that the labor market is composed of jobs of many
different skills and experience levels, as well as workers of many different skills and experience
levels. According to Jovanovich (2001), the most skilled workers (i.e. the most educated) should
occupy the most skilled positions, and there is a mismatch if either the supply of educated
workers or skilled positions surpasses the other. He also states that workers prefer such a match
because they have the opportunity to utilize all of their skills, increasing their feelings of
usefulness, which allows them to command higher salaries. Employers prefer such a match
because individuals who are optimally utilizing their skill sets will maximize productivity for
their firm, and will stay longer at the firm.

2.1.4 The Theory of Job Search

Stephen and Jackman formulated the theory of job search. For Stephen and Jackman (2009), a
typical unemployed person looking for work is expected to pass three stages. At stage one;
he/she collects information about job vacancies. Vacancies come with different pre-assigned
wage and conditions. In stage two, he/she decides to apply for the vacancies that he/she learns of.
The decision to apply for it depends on the expected value of getting a job or not. Lastly, he/she
accepts the offer of any job for which he/she applied in getting it. The success of individual’s
application depends on his/her personal characteristics. Thus, they concluded that individual
factors and the degree of competition from other jobseekers could affect the chance of finding a
productive job.

2.2 Factors of Youth Unemployment

Youth unemployment is the outcome of different socio-economic and demographic factors at

macro and micro level. The micro level factors are directly associated to individuals’
demographic and socioeconomic attributes while the macro level factors are related to the
national issues (Toit, 2003). This study emphasizes on assessing individuals’ demographic and
socioeconomic attributes that influence youth employment. These are broadly classified as
demographic and socioeconomic factors. The detail is presented as follows.

2.2.1 Demographic Factors of Youth Unemployment

2.2.1.1. Migration

The movement of young people is one of the causes for the high levels of urban youth
unemployment problem in most developing countries (Raphael, 2005). Since young people view
migration as an avenue to improve their status and learn new skills, they move in to urban areas
for various reasons (Harris, 2010). Similarly, ILO (2007) and MOY (2004) noted that migration
of young people in their twenties is very high in Africa. Moreover, they also state that youth
often move to institutions for education and training, but many migrants move for employment
related reasons followed by their families. In line with this, Okojie (2003) depicted that
migration of youth has resulted in a concentration of youth in cities and towns where there are
few jobs available in modern sector establishments.

In addition to this, Todaro (1994) and Mlatsheni and Rospabe (2002) state that rural to urban
migration of young and educated people is the very root cause forthe high and ever rising levels
of urban unemployment. A study conducted by Anhet al (2005) and Yisak (2006) showed that
youth having migration experience are more likely to be unemployed than other migrants.
Confirming this, Nwuke (2002) noted that young migrants are highly unemployed in urban areas.
He further stated that in a context where social relations are as crucial as qualifications, young
urban migrants searching for a job face an uphill struggle of surviving with limited social
networks. Sarr (2000) also reaffirmed that youth migrants are three times more unemployed than
other migrants in Africa. It might be possible to deduce that young migrants are more vulnerable
to unemployment in urban areas.

2.2.1.2 Sex

According to Hallerod and Westberg (2006), being one of the demographic variables, sex reveals
substantial differences between female and male with respect employment opportunity. Females
are vulnerable both in short term and long term unemployment than males. ILO (2004) also
conforms the activity rate of young males have been much higher than that of young females due
to the different opportunities society provide to males and females, and domestic activities for
personal or household use. Strengthening this point, Mlatsheni and Rospabe (2002) (2009) found
that lack of employment is more severe for females than for males as 63 percent of economically
active females are unemployed whereas 53 percent of males remain without jobs in South Africa.
They further noted that one of the reasons behind female unemployment is that girls spend much
time in doing domestic work than boys. This leads them to poor academic performance and
sometimes withdrawal from education. It could be concluded that girls therefore end up with less
education and limited skills, and there by resulting in high number of unemployed females.

In the same manner, differences between male and female with respect to employment has also
been prevalent in Ethiopia. With this regard, Guracello and Rosati (2007) state that female youth
across all ages are more likely to be unemployed and are much more likely to be jobless than
male youth. Another research conducted by Berhanu et al (2005) noted that unemployment rate
among young female (20-24) was 38.7 percent while it was only 23.2 percent for young male in
the same age category during the same year. Besides, the CSA (2010) unemployment report also
shows that out of 1,168,591 unemployed persons 41.2 percent were female youth.

Furthermore, Genene et al (2001) confirmed that females are more marginalized than males due
to different socioeconomic factors. Hence, the problem of unemployment is more prevalent
among females than males.

2.2.2 Socio-Economic Factors of Youth Unemployment

2.2.2.1 Education

Education is one the basic factors of youth employment. The achievement of lower educational
level reduces the chances of getting decent and productive jobs in the world of work. In line with
this, Salvador and Killinger (2008), WB (2009), and Morris (2006) noted that unemployment
rate of less educated youth tends to be higher than the unemployment rate of more educated
youth in developing countries because their skills and competencies may not correspond to the
demand of the labor market. In other words, the chance of getting employment for more
educated youth is higher as compared to lower educated youth since they had the required
knowledge and skills. Similarly, Mlatsheni and Rospabe (2002) found that young people with
secondary level education (from grade 8 to grade 12) do not have a better chance to get a job
than people with no education. ILO (2004) also confirms that young people with some education
are vulnerable to unemployment due to the lack of knowledge and skills required by the labor
market.

Accordingly, unemployment is higher for youth had lower educational level in Africa. With this
respect, Okojie (2003) stated that unemployment in Africa concentrated among youth who have
received some education. He further added that youth who had limited education lack the
industrial and other skills demanded in the labor market, thereby making them unattractive to
employers who prefer skilled and experienced workers. Confirming this idea, Haji (2007)and
Anh et al (2005) found that youth who attain limited education are more prone to unemployment
in the continent. In addition to this, they noted that, training in Africa remains largely unrelated
to the labor market needs, which foster the existence of a degree of mismatch between the
demand for and supply of education.

In the same fashion, less educated youth has also been faced the challenge of being unemployed
in Ethiopia. In this regard, Guracello and Rosati (2007) found that among youths, the less
educated youth face more difficulties in finding employment in urban areas of the country.

Based on the aforementioned discussions, it could be said that unemployment is higher for youth
who had limited education than better educated ones.

2.2.2.2 Work Experience

Kingdon and Knight (2001) studied the unemployment in South Africa using the probit model.
The study was conducted using two national household surveys for the mid-1990s. The results
indicate that unemployment in South Africa is determined by their work experience and gender.

According to ILO (2004), the lack of work experience reduces the chances of getting
employment in the modern sectors of the economy. On the other hand, it also added that young
people having work experience, something very much desired by most employers, increases the
possibilities of getting employment. Similarly, a study conducted by Foot (2003) found that
because of limited work experience and other personal characteristics, youth unemployment
tends to be high.

Moreover, Osterman (2005) noted that employers with desirable job characteristics preferred to
hire persons who already had some experience in the labor market. This invariably excluded
young entrant from the labor force. Anh et al (2005) and Hassen (2005) also illustrated that
besides to insufficient work experience, poor work habits, unreliability, and lack of dedication to
the job lead to the segmentation of young workers. They further noted that employers are usually
hesitant to hire young people who have little or no practical work experience since the costs to
retrain and/or upgrade skills of young workers are often too high. As a result, youths are
suffering from the lack the work experience, so that they spend considerable time in looking for
a job.

2.2.2.3Household Income

Household income is one of the socio-economic factors that contribute to the problem of youth
unemployment. ILO (2004) indicated that unemployment rates among young people tend to
decline as household income increases. Youths who reside in a better off family had higher
chance of getting employment since their family tends to invest more in the education of their
sons or daughters. Likewise, a research conducted by Anh et al (2005) and Rees and Gray (2001)
found that family income serves as an important factor in determining the employment
experience of Vietnamese youth. A family in which a young person lives is the strongest
predictor of his or her future in the job market. On the other side, they added that youth who
reside in low income earning family are less employed in the labor market.

Correspondingly, Morris (2006) showed that the significant effects of family economic status,
paternal occupation, education and parental divorce are not able in affecting the employment
status of youth. He further noted that a better income earning household had a number of
opportunities, i.e. higher income can enable youth to have greater access to education,
information and connections. This could facilitate easy access to employment opportunities
available in the market. Also ILO (2010) reveals that young people who reside in low income
household have higher likelihood of being unemployed than adults of being among the working
poor. It also indicates an estimated 152 million young people were living in poor households
(with per-capita expenditure below US$1.25 a day) in 2008, were unemployed. Strengthening
this point, a study conducted by Echebiri (2005)depicts that unemployment has affected youths
from a broad spectrum of socioeconomic groups, both the well and less well educated, although
it has particularly stricken a substantial fraction of youths from low income backgrounds.

2.2.2.4 Family Education

According to Rees and Gray (2002), being one of the socio economic factors, father’s
educational status reveals differences among youth with respect to employment opportunity.
Young people who had well educated parents have higher chance of getting employment. They
further noted that giving assistance in finding work is clearly not the only way in which family
members can influence the employment prospects of young people, but also much education
takes place in the home. So that youths who have well educated parents and who have been
exposed to books and to serious discussion while growing up may have advantages in finding
and holding jobs over other youths with the same amount of formal schooling.

Similarly, Schiefelbein and Farrell (2000) stated that family background in particular father
education has an impact on the insertion of youth to the labor market. They also indicated that
the higher the education of the father, the smaller the number of firms visited, and the higher the
proportion of individuals who have found employment. Furthermore, Morris (2006) noted that as
a measure of social status, father education’s is an important factor in determining employment
status of youth. Therefore, youth who had well educated father could face less challenge in
finding jobs compared with those youth whose father were less educated or illiterate.

2.2.2.5 Job Preference

With regard to job Preference, Okojie (2003) and Haji (2007 noted that educated youth prefer
wage jobs in the formal sectors and would prefer to remain unemployed until they get the type of
job they prefer. Likewise, ILO (1991) also reflected that instead of looking for gainful
employment self or otherwise, the youths waited for the government to find employment for
them. When the government failed to offer employment opportunities, most youths remained
unemployed in Tanzania.
A study conducted by Echebiri (2005) in Nigeria found that most young jobseekers preferred
employment in the organized private sector. They would like to work in banks, oil companies,
manufacturing companies, major marketing companies, and so on. While a large proportion of
youth also preferred to work in the public sectors.

Similarly, another study carried out by Adenikinju and Oyeranti (2004) revealed that youths
from Ethiopia and Tunisia are prepared to wait for a long time for a public sector job instead of
actively seeking a job in the private sector or starting business on their own.

In Ethiopia, job preference has been observed among youth. With this regard, Berhanu et al
(2005) indicates wrong kinds of attitudes and job expectations on the part of youth is prevalent,
including the preference for white collar jobs as opposed to agricultural and manual work.
Moreover, they state that one of the reasons for wrong kinds of attitudes towards jobs is the
inadequacy and excessively academic orientation of the educational systems of the country, and
the result is still visible in the current situation. Therefore, job preference could be seen as a
factor for youth unemployment.

2.2.2.6 Social Networks

Social capitals are important assets to search employment. According to Lange and Martin
(1999), social networks are key instrument to find a job in urban areas with less expense and
difficulty. They also found that youth who use social networks in finding employment are
successful. Social capital theorists account for the differential access to job related information
that workers have and, recognize that possessing more or superior information through social
networks may lead to labor market advantages.

On the other hand, Coleman (2008) and Granovetter (2008) showed that young workers not
utilizing personal networks may miss job opportunities available through personal networks.
Also, Fernandez and Kelley (2001) confirmed that youths with limited or deficient personal
networks may lack knowledge of employment opportunities available in the state or regions.
Consistently, Holzer (1999) discussed that the lack of information can be harmful to young
people labor market outcomes, which are influenced by an individual's access to employment
information via social networks. Toti (2003) also noted that lack of labor market information and
access to the main information networks in the labor market decreases the chance of getting
employment.

2.3 Consequences of Youth Unemployment

The inadequate employment situation of youth has a number of socio-economic, political and
moral consequences (Berhanu et al, 2005; Toit, 2003). Some of the consequences of youth
unemployment are as follows.

2.3.1 Unemployment fosters drug addictions among youths

Unemployed young people are more likely to abuse illicit substances than are employed young
people. According to UN (2003) report, unemployed youth are the main drug users in Sub
Sahara Africa, which accounts 34 million young people representing 7.7 percent of the
continent’s youth population. The report also indicated that Cannabis sativa or marijuana is the
main drugs consumed by youth in the region. Similarly, Curtain (2000) stated that in the
continent, delinquency, crime and drug abuse are on the increase among unemployed youths.
Other scholars Chigunta (2002) and Haji (2007) also confirmed that some of the unemployed
youth have become drunkards; others are on drugs such as marijuana and mandrax. Therefore,
unemployment fosters drug addictions among youth.

2.3.2 Youth unemployment contributes to crime and violence

Youth unemployment also contributes for the prevalence of crime and violence in societies
where employment opportunities are limited. In line with this, Okojie (2003) and Haji (2007)
found that many unemployed youth run criminal enterprises engaged in violence, armed robbery,
car snatching, illegal fuel sales, and illegal importation of arms. Some of which have reached
alarming levels in several African cities, having names such as “Area Boys” in Nigeria and
“Manchicha” in Uganda. Echebiri (2005) also noted that urban society is becoming increasingly
criminalized, especially with the proliferation of youth gangs. He added that crime and violence
have been increasing in many parts of Sub-Saharan Africa as a result of youth unemployment.
Further, Chigunta (2002) states unemployed and disaffected youth appears to play a significant
role in African conflict.
2.3.3 Unemployment results in psycho-social problem on youth

Unemployment is a stressful life event that makes people unhappy. Increases in the
unemployment rate lower the happiness of everyone, particularly the unemployed (Bell and
Blanchfl, 2010). Consistent to this, Toit (2003) also found that depression experience is the
consequences of unemployment. Moreover, Berhanu et al (2005) state unemployment results
social exclusion and a sense of hopelessness on youth.

2.3.4 Economic costs of unemployment

2.3.4.1. Unemployment affects economic development

Youth unemployment is challenging not only for those affected, but also for the economy as a
whole. Salvador and Killinger (2008) found that unemployment among young person implies
unutilized labor potential and thus has a negative impact on potential growth of the economy.
Similarly,(Berhanu et al (2005)state that unemployment is the failure to make use of an
important factor of production, labor, for fostering economic growth. On the other hand, the
increase in criminality in a country as a consequence of youth unemployment causes losses in
foreign direct investment. For example, foreign investors have cited crime as the biggest
deterrent for investment (UNODC, 2003).

2.3.4.2. Youth unemployment results in higher medical costs

According to UNAIDS (2004) report, unemployed young people are at a much higher risk of
contracting HIV/AIDS than employed young people. This is due to persistent behavioral risks,
and lack of information, education and services. Fredriksson and Kanabus (2004) noted that the
annual medical cost of HIV/AIDS is estimated at about $30 per patient in Sub Sahara Africa,
compared with overall public health spending of less than $10 per capita. This means that Sub-
Saharan Africa would have to spend $186 million a year on young people infected by HIV.
 2.4. Conceptual Framework

For the purpose of this study, in examining the determinants of youth unemployment,
demographic and socio-economic variables: namely age , sex, marital status, education, work
experience, household income, family ‘education, social network density, and job preference
were taken as explanatory variables ; whereas youth employment status was the dependent
variable.

Figure 2.2: Conceptual Framework

Demographic variables

 Age
 Sex
 Marital status

Youth Employment
status

Socio-economic variable

 Education
 Work experience
 House hold income
 Family education
 Job preference
 Social network density
 Business Advisory services
 Exposure to any Mass Media
CHAPTER THREE

RESEARCH METHODOLOY

3.1 Description of the study Area

This research was conducted in Sabian (02) Kebele which is located in Dire Dawa
Administration city. Dire Dawa Administration (DDA) is located in the eastern part of Ethiopia
515 kilometer far from Addis Ababa Between 90 27' and 90 49' North latitude and between 410
38' and 420 19' East longitude.

It is bounded by Oromia Regional State in the south and by Somali Regional State in the north,
east and west. The topography of the Administration varies from very steep high mountains to
flat plains where the altitude ranges from 950-2260 m.s.l. The topography of the Administration
involves: mountain ranges, hills, valley bottoms and river terraces, and flat plains. Dire Dawa
Administration is characterized by relatively high temperature throughout the year with minor
seasonal variations.

The town has nine kebele and from this nine kebele, Sabian is of the kebele that this research
was conducted is Sabian (02) kebele which had a total population 69,745 of which 34,454 were
male and 35,291 were female. From total population, 45,336 were youth in the age group 15 to
29 in this kebele. (SCB, 2009)

3.2. Source of Data

The study used both qualitative and quantitative data collected through household survey based
structured questionnaires. The questionnaires were designed and formulated to collect
information about socio-economic and demographic determinants of youth unemployment from
sampled youth.

In addition, secondary data obtained from records of administrative offices, publications,

journals, books and other sources relevant to this study were also used to enrich the
investigation.
3.3. Method of data collection

3.3.1 Measurement Tools

The questionnaire, which consists of structured questions, was prepared to collect information on
socio economic and demographic characteristics of the respondents. The questionnaires
originally prepared in English and for ease of understanding for respondents were translated in to
Amharic orally by me.
Depending on the results of the survey, the data collection instruments was finalized after
making the necessary corrections and reorganizations. Secondary source of data could be also
used to get the registered in Sabian (02) kebele who are unemployed at the time of they are
registered.

3.3.2 Field Work

The field survey for the present research was conducted during the period February to April
2017.To collect the data from the respondent, first we take the registered youth unemployed from
the Sabian communication Bureau (02) kebele and by their phone number and home number we
drop the questionnaires and collect data.

This helps the investigator in obtaining fairly reliable and valid information from the
respondents. Questionnaires open and closed ended, interview and observation were involved in
the study area particularly with young people concerned on the issues of unemployment
challenges, discussion what the government roles and the effect of the problems in the kebele.

3.4. Study variables

3.4.1 Dependent Variable

 Employment status {1if0 iftheytheyareunemployed

are employed }
3.4.2 Independent Variables
 Age
 Sex
 Marital status
 Education level
 Work experience
 House hold income
 Family education
 Job preference
 Social network density
 Exposure to any Mass Media
 Business Advisory services
Variable Code of the variable
Age 1) 15-19(ref) 2) 20-243) 25-29

Sex 1-female(ref) 2-male

Marital status 1) Ever married (includes currently married, divorced,

widowed) (ref)
2) Never married (single).
Education level 1)10th certificate(ref) 2 )diploma
3)degree4)Others

Work experience 1) no work experience(ref)

2) had work experience
House hold income(in moth) 1)less or equal to 400 birr(ref)
2) 401-800 birr
3) 801-1500 birr
4) above 1501 birr
Family education 1) literate(ref)
2) illiterate
Job preference 1-Preferring paid employment(ref)
2_ Self-employment
3)Any available jobs in the labor market

Social network density 1)No social networks(ref)

2) Social network less than 5
3) Social networks 5 and above
Exposure to Any Mass Media 1) Not at all(ref)
2) less a weak
3) At least ones a weak

Business Advisory services 1)Not Received Business Advisory services(ref)

2)Received At least once
3.5. Designs of the study

The research design was cross-sectional design and the sample size selected was simple random
sampling techniques. The target population is consist of youth age between (15-29) years at the
time of survey who are registered in Sabian kebele as unemployed is going to be studied
(questionnaires, observations and semi- structurally interviewed) to determine their
characteristics. Data generated by in-depth interview, document quarrying and observation are
going to be analyzed qualitatively. Primary and secondary data sources were used for this study
on who reside in this kebele, were considered as eligible to the study who are unemployed and
employed at the time of data collected from home to home survey.

3.5.1. Sampling design and sampling techniques

A sample size is a part of a population methodologically selected for purposes of drawing a
conclusion about a population and its characteristics (Allan, 1962). The target population for this
study would be youth who are employed and unemployed in Sabian 02 kebele until April 2017.
We have totally 3856 youth in our sampling frame which is the list of youth unemployed who
are registered in Sabian 02 kebele . In this study simple random sample (SRS) method is adopted
as an appropriate sampling design for selecting a representative sample of the youth unemployed
in Sabian kebele.

3.5.2. Sample size determination

Determining sample size is a key on the overall statistical process. The researcher must find the
correct balance between reliability of the result and cost obtaining those results. In conducting
researches that require taking a sample, we always have the stage of deciding the sample size.
The decision is important because taking too large sample implies waste of resources while too
small sample reduces the usefulness of the results. In order to have an optimum sample size,
there are a number of issues/points one has to take into account. Some of the issues are:
 Objective of the research
 Design of the research
 Cost constraint
 Plan for statistical analysis
 Degree of precision required for generalization
  Degree of confidence with which to conclude etc.
Based on the above information, there are several formulas developed for sample size calculation that
conform to different research situations. In order to determine the sample size required for the study,
this formula must be used:-

n0
Z α /22 pq
n= 1+ no where n0 =
N d2

Z α /2Is the accumulate level of significant usually taken as 1.96 with 95% confidence interval

P is the proportion of youth, who are unemployed.

q is the proportion of youth, who are employed.
n0 is initial approximation sample size.

dis margin of error is 7% = 0.07 d is the absolute precision defined as :

d=( Z α /2) SE, where SE is standard error
n0
n= 1+ no
N
In order to determine the size of the sample, the proportion of youth who are unemployed at Dire
Dawa level was considered for computing maximum possible size. According to CSA (2012),
the proportion of unemployed youth at Dire Dawa level it’s around 22.7% CSA (2012).

(1.96)2∗(0.773)∗(0.227)
no¿ = 137.5693~138
(0.07)2

138
n ¿ 1+138 /3856 =137

Hence, the sample size with N=3856 which is the total youth who are unemployed and
Registered in the Sabian kebele, together with above specifications will be:-

n0=138 implying that n=137

Thus a total of some 137 youth who are unemployed and employed at current time after they are
registered in their kebele have been reviewed for the data collection.
3.6. Method of data analysis

3.6.1. Descriptive statistics

Descriptive statistics is a kind of statistics which describes the data using different measures, like
measures of central tendency (MCT) measures of dispersion and various graphical and
diagrammatical presentations like bar chart, pie chart without making conclusions. These in this
study we will apply the descriptive statistics such as cross tabulation and as much as possible we
use also bar chart and pie chart.

3.6.2. Inferential statistics

Inferential statistics is statically method deals with making inference or conclusion about
population based on data obtained from a limited number of observations that come from
population. Inferential statistics of estimation and hypothesis testing .we use in this study of chi-
square test for the purpose of association between variables and logistic regression model for
examining factor leads to unemployment in this kebele is under consideration.

3.6.3. The Chi-square test of independence

A variety of statistical test are available for analyzing a given set of data. Uses of chi-square is
one of the most appropriate way to use categorical variables, hence the qualitative data used in
Computation of the test statistics and the frequency of associated with each category of the
variables of interest.

The test is applied when we have two or more categorical variables. It is used to determine
dependency or independency of the variable under consideration. Here the use of chi- square is
to test the null hypotheses in which two criteria of classification when applied to the same set of
entry are independent .To check the association between employment status and independent
variables whose categories are placed in a category?

Characteristics of Chi-square

1. The test statistics is given by

 n m
( oij−Eij)2
∑∑ Eij
χ2= i=1 j=1

Where, Oij= observed frequency off the cell in the ith row and jth column.

Eij = Expected frequency off the cell in ith row and jth column.

2. The term 'chi-square' refers to probability function in which the degrees of freedom
provide the only parameter. Actually, there exists an entire family of chi-square
distributions, one for each degree of freedom value.
3. If a graph is drawn for a chi-square distribution, the mean is the number of degrees of
freedom; the mode is always d.o.f. (degrees of freedom) minus 2, except that the mode
cannot be less than zero. There are no negative values of chi-square.

Where the d.o.f. is 30 and less the distribution of χ2 is skewed. For degrees of freedom greater
than 30 in a distribution, the values of χ2are normally distributed. Since most experiments have
degrees of freedom less than 30, the analysis immediately following will deal with the situation
in which theχ2distribution is skewed. Since χ2distribution is more skewed for consecutive
degrees of freedom below 30, it follows that there is a different set of χ2values for each degree of
freedom ranging from 1 to 30

Hypothesis testing

Η0: there is no association between the attributes

Η1: there is association between the attributes

Decision: - compare the p-value with the alpha value

Reject the Ho if p-value < the alpha value

Don’t the Ho if p-value > the alpha value

Compare the calculated test statistics value with the critical or table value of the same statistics

Reject Ho if the calculated value > the critical value

Do not reject Ho if the calculated value <the critical value

3.6.4. Logistic regression model

Logistic regression is a popular modeling approach when the dependent variable is dichotomous
or polychotomous. This model allows one to predict the log odds of outcomes of a dependent
variable from a set of variables that may be continuous, discrete, categorical, or a mix of any of
these. Hosmer and Lemeshow (2000) have described logistic regression focusing on its
theoretical and applied aspect.

Often the outcome variable in social data is, in general not continuous, instead is binary. In such
a case, binary logistic regression is a useful way of describing the relationship between one or
more independent variables and a binary outcome variable that has only two possible values.
Indeed, a generalized linear model is used for binary logistic regression. The most attractive
feature of a logistic regression model is that it neither assumes linearity in the relationship
between the covariates and the outcome variable, nor does it require normally distributed
variables. It also does not assume homoscedasticity and in general has less stringent
requirements than linear regression models. Thus logistic regression is used in a wide range of
applications leading to binary dependent data analysis (Hilbe, 2009; Agresti, 2002).

Logistic regression can be used to predict probability of a dependent variable on the basis of
continuous and/or categorical independent variables and to determine the percent of variance in
the dependent variable explained by the independent variables, to rank the relative importance of
independent variables, to examine interaction effects, and to understand the impact of covariate
control variables.

Logistic model, as compared to its competitor, the probit model, is less sensitive to outliers and
easy to correct a bias (Copas, 1988). In instances where the independent variables are categorical
or a mix of continuous and categorical, logistic analysis is preferred to discriminant analysis
(Agresti, 2007). The assumptions required for statistical tests in logistic regression are far less
restrictive than those for ordinary least squares regression. There is no formal requirement for
multivariate normality, homoscedasticity, or linearity of the independent variables within each
category of the response variable. However, the assumptions that apply to logistic regression
model include: meaningful coding, inclusion of all relevant and exclusion of all irrelevant
variables in the regression model and low error in the explanatory variables.

3.4 .1.Assumptions of logistic regression

The validity of inferences drawn from modern statistical modeling techniques depends on the
assumptions of the statistical model being satisfied. In order for our analysis to be valid, our
model has to satisfy the assumptions of logistic regression such as:-

1. It does not need a linear relationship between the dependent and independent variables.
Logistic regression can handle all sorts of relationships, because it applies a non-linear log
transformation to the predicted odds ratio.

2. The error terms (the residuals) need to be binomially distributed.

3. The assumption of homoscedasticity is not necessary in logistic regression. Logistic regression

can handle ordinal and nominal data as independent variables.

4. Logistic regression requires the dependent variable to be categorical (mostly binary).

Reducing an ordinal or even metric variable to dichotomous level loses a lot of information,
which makes the logistic regression inferior compared to ordinal regression in these cases.

5. Since logistic regression assumes that P(Y=1) is the probability of the event occurring, it is
necessary that the dependent variable is coded accordingly. That is for the factor level 1 the
dependent variable should represent the desired outcome.

6. The logistic regression model should be fitted correctly. Neither over fitting nor under fitting
should occur. That is only the meaningful variables should be included, but also all meaningful
variables should be included.

7. The error terms need to be independent. Logistic regression requires each observation to be
independent. That is that the data-points should not be from any dependent samples design.
8. Logistic regression assumes linearity of independent variables and log odds. Whilst logistic
regression does not require the dependent and independent variables to be related linearly, it
requires that the independent variables are linearly related to the log odds. Otherwise the logistic
regression underestimates the strength of the relationship and rejects the relationship easily, that
is being not significant (not rejecting the null hypothesis) where it should be significant. A
solution to this problem is the categorization of the independent variables.

That is transforming metric variables to ordinal level and then including them in the logistic
regression model.

9. Logistic regression requires quite large sample sizes. Because maximum likelihood estimates
are less powerful than ordinary least squares (e.g., simple linear regression, multiple linear
regression); whilst OLS needs 5 cases per independent variable in the analysis, ML needs at least
10 cases per independent variable, some statisticians recommend at least 30 cases for each
parameter to be estimated.

3.4.2. Binary Logistic Regressions

A binary logistic regression is a special type of logistic regression model which is used to
describe the relationship between one or more independent variables and a binary outcome
variable that has only two possible values. The response variable in this study is dichotomous
which is Bernoulli random variable with two possible values, yi = 1 with probability of
Unemployed Pi = P (yi = 1|Xi) and yi = 0 with probability of employed, 1 − Pi = 1 − P(yi = 1|Xi).

The logistic model is defined as follows. Let n×1 Y be a dichotomous outcome random variable
as explained above and let X (n× (k+1)) denote the collection of k-predicator variables.

x1

[]
1, x 11 , x 12, x 13 , … … x 1 k

[ ]
x2
1 , x 21 , x 22 , x 23 , … x 2 k
x3
X= … … … … … … … … … … … n*(k+1) =
.
… … … … … … … … … … ..
.
1, xn 1 , xn 2 , xn3 , xn 3 , … .. xnk
xn
Where, 𝐗 is called regression matrix, and without the loading column of 1’s, is termed as
predictor data matrix. Then, the conditional probability that the 𝐢th individual is unemployed
given the vector of predictor variables 𝐗i is denoted by 𝐏𝐢 = P (yi = 1|Xi). The expression Pi in
logistic regression model can be expressed in the form of:

1
Pi = P (yi = )= i, 1,2,…, n ----------------------------(3)
xi
1
Where P (yi= Xi ) is the probability of ith individual is unemployed given his/her individual

characteristics xi, and β = (β0, β1… βk) T is a vector of unknown coefficients with dimension of
(k + 1) × 1.

However, the relationship between the probabilities of ith individual is unemployed and his/her
characteristics are nonlinear. In order to make meaningful interpretation, it should be written as a
linear combination of predictors. This is computed using the logit transformation which is
pi B 0 +B1 x 1i +B2 x 2i +.. . Bk x ki
Logit [Pi] = log ( )=
1− pi
The parameter βj refers to the effect of Xj on the log odds that Y = 1, controlling the other X‟s in
the model.

3.5. The Model Specification

Binary logistic regression is most useful when we want to model the event probability for a
categorical response variable with two outcomes. In logistic regression the relationship between
the dependent and independent variable will not be linear. The dependent variable in logistic
regression is usually dichotomous, that is, the dependent variable can take the value 1 with a
probability of success π, or the value 0 with probability of failure 1-π. This type of variable is
called a Bernoulli (or binary) variable. Instead logistic regression the function uses, thus the
response probability, prob (yi=1/xi) is evaluated as:-
 ( β 0+β 1 X 1 +β 2 X 2+. ..+, β kXk )
e
=
( β 0 +β1 X 1+ β2 X 2+.. .+, β kXk )
Pi=prob (yi=1/xi) 1+e
……………………….(3.1)

Suppose that employment status denoted by “Y” which has binary values. When Y=1, it shows
that who are unemployed one and y=0, it shows who are employed.

If pi is the probability youth who are unemployed and (1- pi) will be the probability of youth
who are employed. In terms of odds of success in the logistic regression model can be written
as:-

pi
Odds (y=1) = =exp (β0+β1x1+β2x2+…..+) ……………………. (3.2)
1− pi

Which means that exp (βi), =1, 2... K is the factor by which the odd of occurrence of success

(in this case the youth who is unemployed one) change by a unit increases in ith independent
variable.

Then the logit or log-odds of having Y=1 is modeled as a linear function of theexplanatory
variables as:-
pi B 0 +B1 x 1i +B2 x 2i +.. . Bk x ki
Logit [Pi] = log ( )=
1− pi ---------------------- (3.3)

Where;β0 is the constant of the equation and, β 0, β1, β2…βk are the coefficients of
thepredictor variables. The above equation is known as the logistic function.

3.5.1. Parameter Estimation and Testing

3.5.1.1. Maximum Likelihood Estimation

The most commonly used method of estimating the parameters of a logistic regression model is
the method of Maximum Likelihood (ML) instead of Ordinary Least Squares (OLS) method.
Mainly for this reason the ML method based on Newton-Raphson iteratively reweighted least
square algorithm becomes more popular with researchers (Ryan, 1997). The sample likelihood
function is, in general defined as the joint probability function of the random variables whose
realizations constitute the sample. Specifically, for a sample of size n whose observations are
(y1, y2 … yn); the corresponding random variables are (Y1, Y2… Yn) Since the Yi is a
Bernoulli random variable, the probability mass function of Yi is

f ( yi ) =( πi) yi (1−πi)1− yi--------------------------------------------------------------- (3.5)

Yi = 0 or 1 and i=1, 2… n

Since the observations are assumed to be independent, the likelihood function is obtained as the
product of the terms given in expression (3.5) as follows:

n
l( β)=∏ π ( xi) yi ¿ ¿
i=1

The principle of maximum likelihood states that we use as our estimate of the value which
maximizes the likelihood function. However, it is easier mathematically to work with the log
likelihood function. The log likelihood is:-

n n
(πi)
L ( β ) =ln ⁡[ l(β) ]=∑ yil n + ∑ ln(1−πi)----------------------------------- (3.6)
i=1 (1−πi) i=1

To find the value of β that maximizes L ( β ) we differentiate L (β ) with respect to βand set the
resulting expressions equal to zero. These equations, known as the

Likelihood equations are:

∑ [ yi−π ( xi)]=0 And

i=1

∑ [ yi−π ( xi)]=0………………………………………………………….(3.7)
i=1

For logistic regression the expressions in equation (3.7) are nonlinear in β and thus require
special methods for their solution. These methods are iterative in nature and have been
programmed into available logistic regression software. As such, it represents the fitted or
predicted value for the logistic regression model. An interesting consequence of equation (3.7) is
that:-

∑ yi =∑ π^ i

That is, the sum of the observed values of yis equal to the sum of the predicted (expected) values.
In fact, the maximum likelihood estimates of β in the multiple binary logistic regression models
are those values of β that maximize the log-likelihood function given in equ (3.6)

No closed form solution exists for the values of ^β that maximize the log-likelihood function.
Computer-intensive numerical search procedures are therefore required to find the maximum
likelihood estimates ^β and hence^π , because the multiple logistic regression model computes the
probability of the selected response as a function of the values of the predictor variables. There
are several widely used numerical search procedures, one of these employs iteratively
reweighted least squares algorithm. In this study, we shall rely on standard statistical software
programs specifically designed for logistic regression to obtain the maximum likelihood
estimates of parameters.

3.6. Model diagnostics and checking

After fitting the logistic regression model or once a model has been developed through the
various steps in estimating the coefficients, there are several techniques involved in assessing the
appropriateness, adequacy and usefulness of the model. First, the importance of each of the
explanatory variables will be assessed by carrying out statistical tests of the significance of the
coefficients. Then the overall goodness of fit of the model will be tested (Agresti, 1996).

The Pearson's Chi-square, the likelihood ratio tests (LRT), Hosmer and Lemeshow Goodness of
fit Test and the Wald tests are the most commonly used measures of goodness of fit for
categorical data (Hosmer and Lemeshow, 1989).
3.6.1. Goodness of fit for logistic regression

The goodness of fit of a model measures how well the model describes the response variable.
Assessing goodness of fit involves investigating how close values predicted by the model are to
the observed values. The appropriateness of the fitted logistic regression model needs to be
examined before it is accepted for use as in the case of all regression models.

Assessing goodness of fit involves investigating how close values are predicted by the model
with that of observed values (Bewick et al., 2005). The comparison of observed to predicted
values using the likelihood function is based on the statistic called deviance.

n
pi 1− pi
D=-2∑ yiln(
i=2
[ yi ]
) + (1-yi) ln (
1− yi
¿¿

For purposes of assessing the significance of an independent variable, the values of D are
compared with and without the independent variable in the equation as given below:

D = Do − DL
Where D0 -deviance of model without the explanatory variable and
D1-deviance of model with the explanatory variable included.

D has a chi-square distribution with degree of freedom equal to the difference between the
numbers of parameters estimated in the two models.

3.6.2. The likelihood ratio test

The likelihood ratio (LR) test is performed by estimating two models and comparing the fit of
one model to the fit of the other. Removing predictor variables from a model will almost always
make the model fit less well (i.e., a model will have a lower log likelihood), but it is necessary to
test whether the observed difference in model fit is statistically significant. The likelihood ratio
test does this by comparing the log likelihoods of the two models, if this difference is statistically
significant, then the less restrictive model (the one with more variables) is said to fit the data
significantly better than the more restrictive model. If one has the log likelihoods from the
models, the likelihood ratio statistic is fairly easy to calculate. The likelihood ratio test is
performed to test the overall significance of all coefficients in the model on the basis of test
statistic:

lo
G2 = -2 ln ⁡( )= =-2[log (Lo)-log (L1)]
l1

Where, L0 is the likelihood of the null model and L1 is the likelihood of thesaturated model. The
statistic G2 plays the same role in logistic regression as the numerator of the partial F-test does in
linear regression.

Under the global null hypothesis, H0: β1 = β2 = ... = βp = 0 the statistic G2 followsa chi-square
distribution with p degrees of freedom and measures how well the independent variables affect
the response variable.

This natural log transformation of the likelihood functions yields an asymptotically chi-squared
statistic with degree of freedom equal to the difference between the numbers of parameters
estimated in the two models (Menard, 2002).

Decisions; If the likelihood ratio test (G 2)> x 2 α (k ), H0 will be rejected at given level of
significant then there is overall significant effect of independent variable on the probability of
success.

3.6.3 The Hosmer and Lemeshow Test Statistic

This goodness-of-fit statistic is used to assess the fit of a logistic regression model. Hosmer and
Lemeshow goodness of fit test divides subjects in to deciles based on predicted probabilities and
then computes a chi-square from observed and expected frequencies. Using this grouping
strategy, the Hosmer- Lemeshow goodness-of-fit statistic, Ĉ is obtained by calculating the
Pearson chi-square statistic from the gx2 table of observed and estimated expected frequencies.
A formula defining the calculation of Ĉ is as follows:

q 2
O −E j )
^ ∑ ( j
C=
j =1 n j p j ( 1− p j ) …………...……………….. (Douglage.Moutgometry,
2006)
Where, Oj= observed number of cases in jthgroup (indicate 0’s & 1’s that are observed in the
Dependent variable)
Ej= expected number of cases in jth group.

nj=is number of observation in the jth group.

If the observed number of events differs from what is expected by the model, the statistic C’ will
be large and there will be evidence against the null hypothesis that the model is adequate to fit
the data. This statistic has an approximate chi-square distribution with (g-2) degree of freedom.
This test is more reliable and robust than the traditional chi-square test (Agresti, 2002).

3.7. Tests of individual Predictor

3.7.1. The Wald Test

For each explanatory variable in the model there will be an associated parameter. This test is
used to test the statistical significance of each coefficient in the model .The Wald test described
by Agresti, 1996; is one of a numbers of ways of testing whether the parameters associated with
a group of explanatory variables are zero. If for a particular explanatory variable, or a group of
explanatory variables, the Wald test is significant, then would conclude that the parameters
associated with these variables are not zero, so that they should be included in the model. If the
Wald test is not significant then these variables can be omitted from the model. Wald X 2 statistics
can be used to test the significance of individual coefficients in the model and are calculated as
follows.

Z2 =¿2 ~ X2(1)

Each Wald statistic is compared with X2distribution with 1 degree of freedom.

For large sample size assuming normality of maximum likelihood estimates the Wald statistic
has an approximate chi-squared distribution with one degree of freedom

(Stevenson 2008).
 Hypothesis testing

The hypothesis testing for the ith explanatory variable will be;-

1st step

 Ho: βi=0
 H1: not Ho( βi ≠ 0 ¿

2nd step

Wald test statistics Z=¿

α
A) If the Wald test statistics is greater than 1.96 we reject Ho (Wald>Z )
2
B) If p-value is less than α value (p-value <0.05) we reject Ho
C) If the confidence interval of the odds ratio exclude one we can reject Ho

Conclusion:-the coefficients of parameter is statistically significant (it has significant effect on

the dependent variable)

3.8. Logistic Regression Diagnostics

Regression diagnostics were developed to measure various ways in which a regression relation
might derive largely from one or two observations.

3.8.1 Residuals Analysis

Residual analysis for logistic regression is more difficult than the linear regression models
because the responses take on only the values 0 and 1. Thus the ith ordinary residual will assume
one of the two values as:

ϵ^ 1−^π i, Yi=1
{ − π^ , Yi=0 }
The ordinary residuals will not be normally distributed and, indeed their distribution under the
assumption that the fitted model is correct is unknown. Plots of ordinary residuals against fitted
values will generally be uninformative. In linear regression a key assumption is that the error
variance does not depend on the conditional mean E (Y|X=x). However, in logistic regression,
the errors follow a binomial distribution and, as a result, the error variance is a function of the

conditional mean as V ( X Y=x )=πi ( 1−πi ) , Hence, the ordinary residual can be made more

comparable by dividing them by the estimated standard error of Yi which is known as Pearson
residual denoted by pri and defined as

ei Yi−πi
pri= πi(1−π i) = πi(1−π i)
√ √

The Pearson residuals are directly related to the Pearson chi-square goodness-of fit statistic. The
square of Pearson residual measures the contribution of each binary response to the Pearson chi
square test statistic but the test statistic does not follow an approximate chi-square distribution
for binary data without replicates. The Pearson residuals do not have unit variance since no
allowance has been made for the inherent variation in the fitted value. A better procedure is to
further standardize the ordinary residuals by their estimated standard deviation that is called
Studentized Pearson residuals. Then Studentized Pearson residuals spri are defined as:

ei pri
Spri= πi(1−π i)(1−hii) = (1−hii)
√ √

Where hii is the ith diagonal element of the n×n estimated hat matrix H. Studentized Pearson
residuals are primarily helpful in identifying influential observations and those build in
information about the influence of a case, whereas Pearson residuals do not. More influential
cases with high leverages result in high Studentized Pearson residuals. Studentized Pearson
residuals approximately follow the standard normal distribution for large (n≥30) sample and it
can be used as an approximate chi-square distribution (Rawlings, 1998).
3.8.2 Influential Statistics

Cook’s D: Measure of aggregate impact of each observation on the group of regression

coefficients, as well as the group of fitted values. In logistic regression, a case is identified as
influential if its Cook's distance is greater than 1.0 (Hosmer- Lemeshow, 2000). The Cook’s
distance statistic assesses the influence of individual cases and is measure of the change in the
regression coefficient if an observation is deleted from the model.

Cook's distance considers the influence of the ith value on all n fitted values and not on the fitted
value of the ith observation. It yields the shift in the estimated parameter from fitting a regression
model when a particular observation is omitted. All distances should be roughly equal; if not,
then there is reason to believe that the respective case(s) biased the estimation of the regression
coefficients. Relatively large Cook statistics (or Cook's distance) indicates influential
observations. This may be due to a high leverage, a large residual or their combination. There are
different opinions regarding what cut-off values to use for spotting outliers. A simple operational
guideline of Di > 1 has been suggested (Rawlings, 1998).

DFBETAS: Measure of how much an observation has affected the estimate of a regression
coefficient (there is one DFBETA for each regression coefficient, including the intercept).

2
Values larger than in absolute value are considered highly influential.
√n

Leverage Values (Hat Diag): Measure of how far an observation is from the others in terms of
the levels of the independent variables (not the dependent variable). Observations with values
larger than one are considered to be potentially highly influential (Belsley et al., 1980).
CHAPTER FOUR

STATISTICAL DATA ANALYSIS

The purpose of this chapter is to analyze the effect of different socio-economic and demographic
determinants of youth unemployment in Dire Dawa Sabian (02) kebele using the data from the
Sabian (02) kebele, what they collect in 2009 and as base we use this data and collect from youth
by preparing questionnaire.

The response variable considered in this study is binary assuming two outcomes (0 = employed,
1 = not employed), which are indicators of Employment status of Sabian youth. Descriptive and
binary logistic regression methods are used to measure the determinants of employment status.
The data are analyzed using the Statistical Package for Social Sciences (SPSS) version 16.

4.1 Descriptive statistics

1) Employment status of the respondent’s distribution in this kebele

 Employment status of youth in sabian kebele

Unemployed
45.3 Employed

54.7

Employment status of Respondent

Valid Cumulative
Frequency Percent Percent Percent

Valid Employed 75 54.7 54.7 54.7

Unemployed 62 45.3 45.3 100.0

Total 137 100.0 100.0

In the study, respondents were also asked about their employment status in the survey date. As
figure above shows, out of the 137 respondents, the majority of the respondents 75(54.7 percent)
were employed youth by creating their job and other of them are government employment and
some percent are grouped in to one-to five group and make job that government has plays a great
role on this job opportunity of youth by bind youth under Small and Micro Enterprises.
The remaining of the respondents 62 (45.3 percent) were found unemployed at the time of the
study and we also ask them about their contribution on searching job available in the labor
market, and they said that job available on the labor market needs at least three and above work
experience, higher educational level, there is corruption also based on relatives and we also ask
them how government can be initiated in making job opportunity for youth in this kebele? And
they reply for us by saying; we registered in Sabian 02 kebele for the sake of government can
make the job for us by giving some money and other advising how to create job opportunity. But
when government can give this chance; we don’t have any information. Thus all this can be the
reason why we are unemployed at this time.

Also we take the base information that they give for us by orally and we deals with what is the
variable that leads youth to be unemployed in this kebele and we analyze their effects as follows.

Variables Categories Employment status of Respondent Total (%)

Employed (%) Unemployed
(%)
Sex of respondent female 26(42.6%) 35(57.4%) 61(100%)
male 49(64.5%) 27(35.5%) 76(100%)
Age of respondent 15-19 16(44.4%) 20(55.6%) 36(100%)
20-24 36(52.2%) 33(47.8%) 69(100%)
25-29 23(71.9%) 9(28.1%) 32(100%)
Educational level Grade 10th cert 18(32.7%) 37(67.3%) 55(100%)
Diploma 30(60%) 20(40%) 50(100%)
respondent
Degree 27(84.4%) 5(15.6%) 32(100%)

Marital status of ever married 36(72%) 14(28%) 50(100%)

respondent single 39(44.8%) 48(55.2%) 87(100%)
Work experience No experience 25(33.8%) 49(66.2%) 74(100%)
of respondent Have experience 50(79.4%) 13(20.6%) 63(100%)
Family Income of <=400 19(33.3%) 38(66.7%) 57(100%)
respondent 401-800 14(48.3%) 15(51.7%) 29(100%)
801-1500 16(69.6%) 7(30.4%) 23(100%)
Above 1500 26(92.9%) 2(7.1%) 28(100%)
Family education Literate 43(61.4%) 27(38.6%) 70(100%)
Illiterate 32(47.8%) 35(52.2%) 67(100%)
level
Job Preference of Preferring more 27(84.4%) 5(15.6%) 32(100.0%)
respondent paid job
 Self- 32(61.5%) 20(38.5%) 52(100%)
employment

Any available 16(30.2%) 37(69.8%) 53(100%)

in the labor
market
Social network of No social netw. 29(47.5%) 32(52.5%) 61(100%)
respondent Social network 19(51.4%) 18(48.6%) 37(100%)
<=5
Social network 5 27(69.2%) 12(30.8%) 39(100%)
and above
Exposure to any Not at all 20(42.6%) 27(57.4%) 47(100%)
Twice a week 32(60.4%) 21(39.6%) 53(100%)
mass media
At least twice a 23(62.2%) 14(37.8%) 37(100%)
week
Business advisory Not Received 15(29.4%) 36(70.6%) 51(100%)
Received 60(69.8%) 26(30.2%) 86(100%)
service received

2) Sex of respondent distribution of this kebele

70
64.5

60 57.4

50
42.6
40 35.5
employed
30 unemployed

20

10

0
female male

Sex of a respondent is one of the demographic variables that were found to be related to
employment status of youth in this kebele. The relationships between sex and youth employment
status illustrated in the above table show that, From total of 137 youth included in the study, 61
of them are females included in the sample and Out of these 61 female; 35(57.4%) were
unemployed and 26(42.6%) of females are employed at the current time.
While 76 of them are male included in the study and out of these 27(35.5 percent) were
unemployed and 49(64.5percent) of males are currently employed in this kebele. These shows
that female are more influenced by another factor to be employed in this kebele than male.

3. Age of the Respondent distribution in this kebele

The tables above reveal that the Employment status of 137 youth differs by their age and Age is
also another factor contributed to leads youth to be unemployment. For instance: from the total
of 36 youth whose age is between15-19 included in the study; 20 (55.6%) of youth are
unemployed while the remaining 16(44.4%) is employed. and also from the total 69 of youth
whose age is 20-24 included in the study, 33(47.8%) of them are unemployed and 52.2% of them
are employed. While from 32 of youth whose age is 25-29 included in the study, 9(28.1percent)
of youth are unemployment one and the left 23(71.9percent) of them are employed. these implies
that more of youth whose age is between 15-19 are more related to chance of unemployment.

Even though there is Age difference in the youth of Sabian kebele, they are not much influenced
by their age to create or search the opportunity of employments.

4) Educational level of respondent distribution in this kebele

90 84.4
80

70 67.3
60
60

50
40 unemployed
40 employed
32.7
30

20 15.6

10

0
grade 10 th diploma degree
One of the variables used to discuss the socio-economic profile of respondents in this study is
the educational level of the respondents. The distribution of respondents according to their
educational level is presented in table above. The data on the educational level of respondents
illustrated that for the total of 137 respondent included in the study, 55 of them are who have
grade 10th certificate, and out of these 55, the higher proportion 37(67.3 percent) are who are
unemployed one, and the left one 18(32.7percent) is employed. While from 50 youth who
attained diploma level 30(60 percent) are unemployed and 20(40 percent) are employed in this
kebele.

And total 32 of the respondent’s attained Degree level, from these 27(84.4percent) are employed
and 5(15.6%) are unemployed. the total population under study who are unemployed one in this
kebele due to lack of educational level. In the above table it revealed that the youth who have
less educational level have less opportunity to be employed in this current level at this kebele.

5) Marital status of respondent’s distribution in this kebele

As we have seen in the above cross tabulation between marital status and employment status 137
of youth included in our study, from 50 youth who are married, 14(28percent) are unemployed
and the remaining 36(72percent) of youth are employed by getting chance of creating their own
job and by other means. While from 87 youth who are single (not married), 48(55.2percent) are
unemployed and the remaining 39(44.8%) are employed by getting chance of employment by
other means. As far as the relationship between marital status and youth employment status is
concerned, the percentage of unemployment was higher for single youths (55.2 percent) than
ever married youth (28 percent).

6) Work experience of respondent distribution in this kebele

Total 137 Respondents were also asked whether they had been engaged in any productive work
or not prior to the survey date. The table above also reveals that from the total of 74 youth who
does not have work experience, 49(66.2%) of youth are unemployed one and the remaining one
25(33.8%)are employed. while only 13(20.6%) of youth who have work experience are
unemployed and 50(79.4%) are employed, from total 63 youth who have work experience. This
shows that youth who have no work experience can’t get the opportunity to be employed. So
work experience can influence youth to be employed in this kebele.

7) Family Income of respondent distribution in this kebele

Table above also shows that the proportion of unemployment status of 137 youth vary by
households‟ economic status, The highest percentage of unemployment was observed among 57
youth from poor households whose monthly income is less than 400 are 38 ( 66.7%) are
unemployed and the remaining 19(33.3%) are employed while, as opposed to the lowest
percentage of youth unemployment recorded for youth residing in with monthly family
income is 401-800 are 15( 51.7%) are unemployed and the remaining 14(48.3%) are employed
from the total of 29 youth who live with monthly family income of 401-800. And from the total
of 23 youth whose monthly family income is 800-1500, 7(30.4%) are unemployed and the
remaining 16(69.6%) are employed one. The lowest percentage of youth residing with rich
households 2(7.1%) are unemployed and the left, 26(92.9%) are employed from the total of
youth 28 of youth who live with rich family those included in our study. This indicate that Youth
who are living with rich house hold can create their own job or can get more chance of employed
than that of youth who live with less family income level.

8) Family education level Distribution in this kebele

As far as the relationship between 137 respondents family’ educational status and youth
employment status is concerned, from the total of 67 youth whose family are illiterate included
in the study, the percentage of unemployment was higher 35 (52.2percent) and the left
43(61.4%) of youth are employed. Among those respondents whose family’ were literate27
(38.6percent) are unemployed and the remaining 43(61.4%) are employed .from total of 70 youth
included in the study.

9) Job preference of the respondent distribution in this kebele

In this regard, as shown in Table above for job preference of 137 youth, from of 32 youth who
prefer more paid employed included in the study 5(15.6 percent) of the unemployed respondents
preferred to work in the formal sectors (government and private institutions) as paid workers and
the remaining 27(84.4%) are employed. from 52 youth those who prefer to engage in self-
employment were, 20(38.5 percent) are unemployed and the remaining 32(61.5%) were
employed. While from53 youth who prefer any available job in the labor market, 37(69.8
percent) and 16(30.2) are unemployed and employed respectively from youth were who prefer
any available job in the labor market.

According to this study many youth are unemployed due to another factor rather than preferring
paid employment in this kebele. They prefer any available job in the labor market, but they are
still unemployed in this kebele.

10) Social net work of respondent distribution in this kebele

Social network density of a respondent is one of the social capitals related to youth employment
status. As shown in above Table of 137 social network density of youth,61 of them are youth
who doesn’t have social net work and out of this youth 29(47.5percent ) are employed and the
remaining 32(52.5%) are unemployed at the current time. While from 37 youth who have social net work
less than five from sample, 18(48.6%) of them are unemployed and the remaining 19(51.4%) of them are
employed at the current time.

From 39 youth who have greater than five social network density, 12(30.8%) of them are unemployed
and the remaining 27(69.2%) of them are employed in this kebele at the time of survey. this indicate that
youth who have week social network in this kebele can’t get any information about the availability any
job on the labor market and they are influenced due to this.

11) Exposure to any mass media of Respondent distribution in this kebele

The exposure of 137 youth to any mass media like frequency of listening to radio is another
variable to affect youth employment status. From 47 youth who doesn’t follow any mass media
due to some cases, 27(57.4%) are unemployed and the remaining 20(42.6%) are employed at the current
time by another means. While from 53 youth who follow media twice a week, 21(39.6%) of them are
Unemployed and 32(60.4%) of them are employed at the current time. Also 37 of youth in this kebele
follow the mass media in At least twice a week, from these 14(37.8%) of them are unemployed and the
remaining 23(62.2%) of them are employed at the current time . Then following (exposure to) mass
media can have their own effects on the youth who does not follow this media.
12) Business Advisory service Received distribution in this kebele

The relationship between youth employment status and access to business Advisory services was
found to be statistically significant. Table above and graph below also presents the differentials
in 137 youth employment status with business advisory service status. It indicates that youth
unemployment from the 51 youth who doesn’t get any training from a Business advisory service,
36(70.6%) are unemployed one and the remaining 15(29.4%) are employed at the current time.

.While from 86 of youth who can get at least one times the Business Advisory service, only
26(30.2%) are unemployed one and the left 60(69.8%) are employed at the current time. this
indicates that youth must get training from Business advisory service in order to get any
opportunity to be employed in this kebele.

80
70.6 69.8
70
60
50
40 unemployed
29.4 30.2 employed
30
20
10
0
not received received

13) Sector create job opportunity for society to decrease Unemployment

 sector creating job opportunity to decrease
unemployment

27 government
private sector
35.8
NGO

37.2

As we have seen in the above table government has play significant role in decreasing
unemployment in this kebele by grouping youth into Small and Micro Enterprises in 35.8%
from total of 100%. And greater percentage of unemployment is decreased by private sector or
their own business in 37.2% while non government plays a little percent in decreasing
unemployment youth by creating job opportunity in only 27% out of 100%.

14. Ways of Government can be affected by unemployment case

ways of government can be affected by unemployment

case in sabian kebele
54 53.3

52
ways of government can be
50 affected by unemployment case
in sabian kebele
48 46.7
46

44

42
political instability loss of income tax
The above table shows that government can be affected by loss of income tax, if the number of
youth in Sabian kebele are increased by suffering unemployment case by 46.7% and also
affected by political instability in the community that leads to poverty of that city as specific and
as Ethiopia as general by 53.3% from 100%.So Government must decrease the unemployment
case in this kebele in order to get income tax and respecting political stability by giving job
opportunity for youth who are unemployed.

4.2 Inferential statistics

4.2.1. Chi-square test of association between Youth Employment status and socio-economic
and demographic variable in Sabian 02 Kebele

This chi-square test of association is used to test the independence between dependent variable
and dependent variable that we take in our study .to check this association we see the p-value of
the Pearson chi-square as shown in the following table. And if the p-value is less than alpha
value (p-value<0.05) then there is dependency between them.

NB:-In our study we use this chi-square to check individual significance of the variable and the
one which is insignificant in chi-square is not included in our logistic regression model.

Variables Categories Employment status of Pearson Sig.

Respondent Chi-Square
Employed Unemployed value

Sex of respondent female 26 35 6.521 0.011

male 49 27
Age of respondent 15-19 16 20 5.516 0.063
20-24 36 33
25-29 23 9
Educational level Grade 10th cert 18 37 22.659 0.000
Diploma 30 20
respondent
Degree 27 5

Marital status of ever married 36 14 9.463 0.002

respondent single 39 48
Work experience No experience 25 49 28.537 0.000
of respondent Have 50 13
experience
 Family Income of <=400 19 38 29.493 0.000
respondent 401-800 14 15
801-1500 16 7
Above 1500 26 2
Family education Literate 43 27 2.581 0.108
Illiterate 32 35
level
Job Preference of Preferring more 27 5 25.208 0.000
respondent paid job
Self- 32 20
employment

Any available 16 37
in the labor
market
Social network of No social netw 29 32 4.753 0.093
respondent Social network 19 18
<=5
Social network 27 12
5 and above
Exposure to any Not at all 20 27 4.32 0.115
mass media Twice a week 32 21
At least twice a 23 14
week
Business advisory Not Received 15 36 21.045 0.000
Received 60 26
service received

1. Chi-square test of association between sex and employment status of respondent

Ho: Employment status of respondents and sex of respondents are independent.

H1: employment status of respondents and sex of respondents are dependent.

Decision Reject H0 since p-value is less than 0.05(0.00<0.05)

conclusion: As we seen the above statistical output the Pearson chi- square, p-value is less than
level of significance(α=0.05).therefore we reject our null hypothesis and accept alternative
hypothesis the employment status depends on the sex of respondent. The data which is collected
from Sabian (02) kebele shows as sex difference and employment status is highly related.
NB:-This indicates that sex is one of the significant variables that are entered in to our model.

2. Chi- square test between employments status and educational level of respondent

Ho: Employment status of respondents and educational status of respondents are independent.

H1: Employment status of respondents and educational status of respondents are dependent.

Decision Reject H0 since p-value is less than 0.05(0.00<0.05)

conclusion As we seen the above statistical output the Pearson chi- square, p-value is less than
level of significance(α=0.05)therefore we reject our null hypothesis and accept alternative
hypothesis the employment status depends on the educational level of respondent. The data
which is collected from Sabian (02) kebele shows as education level and employment status is
highly related.

Then more skilled and educated youth can get job opportunity than that of who has less skilled
and less educated youth in this kebele.

3. Chi- square test between employments status and marital status of respondent

Ho: Employment status of respondents and marital status of respondents are independent.

H1: Employment status of respondents and marital status of respondents are dependent.

Decision Reject H0 since p-value is less than 0.05(0.00<0.05)

Conclusion As we seen the above statistical output the Pearson chi- square, p-value is less than
level of significance(α=0.05) therefore we reject our null hypothesis and accept alternative
hypothesis the employment status depends on the marital status of respondent. The data which
is collected from Sabian (02) kebele shows as marital status and employment status is highly
related.
The chance being unemployment is observed on the single youth who doesn’t have any income
to search or create its own job. That leads to strike between government and youth in this kebele.

4. Chi- square test between employments status and work experience of respondent

Ho: Employment status of respondents and work experience of respondents are independent.

H1: Employment status of respondents and work experience of respondents are dependent.

Decision Reject H0 since p-value is less than 0.05(0.00<0.05)

Conclusion As we seen the above statistical output the Pearson chi- square, p-value is less than
level of significance(α=0.05) therefore we reject our null hypothesis and accept alternative
hypothesis the employment status depends on the work experience of respondent. The data
which is collected from Sabian (02) kebele shows as work experience and employment status is
highly related and the one who have work experience can get job opportunity in this kebele.

5. Chi- square test between Family income and employment status of respondent

The Pearson Chi-Square above indicates that there is greater association between family income
of youth and that of employment status of respondent in this kebele (x2= 29.493, P <0.05). As
the income of the household increases, the risks of being unemployed would decrease since
families could afford or invest on further education and training of their sons or daughters. The
chi-square test exhibited a significant association between household income and youth
employment status.

6. Chi- square test between Job preference and employment status

The test of association result indicate the existence of a statistically significant association
between job preference and youth employment status (x2= 25.208a, P <0.05).this variable is
significant effect on employment status of employment.

7. Chi- square test between Access business advisory services

Pearson Chi-Square in the above table show that there is significant association between
Employment status of youth and access to Business advisory service (x2 =21.045a P <0.05). So
in order to get job opportunity they must access Business advisory service that is given from
Sabian 02 kebele.

NB:-The variable that has high p-value (p-value >0.05) are insignificant in our study. The chi-
square test of association is used as Univariate logistic analysis that checks the significance of
each independent variable with dependent variable. So the insignificant one in the above chi-
square table one is excluded from the logistic regression model

4.2.2. Binary logistic Analysis

4.2.2.1. Determinants of Youth Unemployment in the Sabian (02) kebele

Besides binary logistics analysis, the demographic and socio-economic determinants of youth
unemployment were examined using logistic regression model since the dependent variable is
dichotomous. Binary logistic regression model is the multivariate statistical tool used to analyze
the relationship between the dependent variable (youth employment status) and the predictor
variables; namely sex, marital status, education, work experience, business advisory services,
household income, and job preference. The logistic regression model predicts the log odds
(youth unemployment vs. employment) of the dependent variable. The model is expressed by:-

Log (P/1-P) = B0+B1X1+B2X2+B3X3+B4X4+…………+BkXk

Where, P is the predicted probability of the event unemployed coded with 1 and 0 otherwise.

The regression coefficient together with their sign indicates the magnitude and direction of the
effect in the log odds, being the category of interest of response variable for a unit of increase in
the predictor variable. And exp (Bi) is the estimated multiplicative change in the odds for a unit
of increase in the predictors, controlling the effects of others (Johnson and Wichern, 2007;
Walker, 1996). A positive predicative coefficient (B>1) means the predicted odds increases as
the predictor value increases, and a negative coefficient (B<1) indicates that the predicted odds
decrease as the predictor value increases. Hence, if the value of the odds ratio exp (B) is >1, the
chance of unemployment is higher for a member of the group in relation to the reference
category. An odd ratio of less than 1 indicates lower chance of unemployment in relation to the
reference category.

In this study those reference categories are, female for sex, ever married for marital status,
grade 10th certificate for educational level, no work experience for work experience, those
family income <=400 for family income, preferring more paid job for job preference and not
received for business advisory service are those we take as reference category in our study. and
the output of logistic model analysis is as follows:-

Case Processing Summary

Unweighted Casesa N Percent
Selected Cases Included in Analysis
137 100.0

Missing Cases 0 .0
Total 137 100.0
Unselected Cases 0 .0
Total 137 100.0
a. If weight is in effect, see classification table for the total number of
cases.

Table above provides a basic descriptive window showing how many subjects were analyzed,
and how many subjects were missing. As we can seen in above, all 137 subjects in this analysis
were included, with zero subjects missing, and none unselected.

Dependent Variable
Encoding

Original Internal
Value Value

Employed 0
Unemployed 1
This coding indicates that the dependent variable of this study is the employment status of youth
which is coded as 1 if its unemployed and 0 for employed one.

Block 0: Beginning Block

Iteration Historya,b,c
Coefficients
Iteration -2 Log likelihood Constant
Step 0 1 188.687 -.190
2 188.687 -.190
a. Constant is included in the model.
b. Initial -2 Log Likelihood: 188.687
c. Estimation terminated at iteration number 2 because parameter estimates changed
by less than .001.

Classification Tablea,b

Predicted

Employment status of
Respondent
Percentage
Observed Employed Unemployed Correct

Step 0 Employment status of Employed 75 0 100.0

Respondent
Unemployed 62 0 .0

Overall Percentage 54.7

a. Constant is included in the model.

b. The cut value is .500

Variables in the Equation

B S.E. Wald df Sig. Exp(B)

Step 0 Constant
-.190 .172 1.230 1 .267 .827

The null model tries to show the log odds of unemployment without the presence of any
predictor variable which is usually unrealistic is ln (odds) = -0.19 If we exponentiations both
sides of this equation we find that our predicted odds [Exp (B)] = 0.827. That is, the predicted
odd of unemployment is 0.827 since 62 of our subjects are unemployment and 75 are employed,
our observed odds are 62/ 75= 0.827.

Block 1: Method = Enter

Omnibus Tests of Model Coefficients

Chi-square df Sig.

Step 1 Step 99.608 11 .000

Block 99.608 11 .000

Model 99.608 11 .000

Consider the model which includes all predictors. Omnibus Tests of Model Coefficients gives us
a Chi-Square of 99.608 with 11 df which is significant at 0.000. This is a test of the null
hypothesis that adding the predictors to the model has not significantly increased our ability to
predict unemployment case made by our subjects. Since our omnibus test is significant we can
conclude that adding the predictors to the model has significantly increased our ability to
predict unemployment case made by our subjects.

Test of individual parameter (variable) which Omnibus Tests of Model Coefficients indicate that
if we add on our independent variable to the model is they are statistically significant.
Model Summary
Step -2 Log likelihood Cox & Snell R Square Nagelkerke R Square
a
1 89.079 .517 .691
a. Estimation terminated at iteration number 7 because parameter estimates changed
by less than .001.

Table above gives result of "Model Summary," which are summary statistics for the model at
"Step 1" which is the model with 7 predictors. Under Model Summary we see that the - 2 Log
Likelihood statistics is 89.079. This statistic measures how poorly the model predicts the
decision. The smaller the statistic, the better the model, so since the value of this statistics is
smaller, then our model is better model. Although from iteration history (beginning block) we
can see that,-2 log likelihood for the constant only model is 188.687. Adding the predictor
variables reduced the -2 Log Likelihood statistics by 188.687-89.079=99.608 (the value of Chi
square above).

The "Cox& Snell R Square" value is 0.517. This statistic is referred to as a "pseudo-R" statistic,
in that it is designed to tell us something similar to what R-squared tells us in ordinary least-
squares regression, that of the proportion of variance accounted for in the dependent variable
based on the predictive power of the explanatory variables in the model(Meyer, Gamst,&Guarino
2006).this implies that 51.7% of the employment status is explained by logistic model that
include all independent variable and the remaining one is explained by other factor, so it needs
large sample size to identify this factor that influence youth in these kebele from employment
opportunity.
4.3.1.1. Goodness- of- Fit

Hosmer and Lemeshow Test

Step Chi-square df Sig.

1 6.913 8 .546

The Hosmer and Lemeshow Goodness-of-Fit Test divides subjects into deciles based on
predicted probabilities, and then computes a chi-square from observed and expected frequencies.
The p-value=0.546 here is computed from the chi-square distribution with 8 degrees of freedom
and indicates that the logistic model is a good fit. That is, if the Hosmer and Lemeshow
Goodness-of-Fit test statistic is 0.05 or less, we reject the null hypothesis that there is no
difference between the observed and predicted values of the dependent; if it is greater, as we
want, we fail to reject the null hypothesis that there is no difference, implying that the model's
estimates fitted the data and observed one is equal. Therefore, our fitted logistic regression model
is good fit.

State hypothesis

H0:-the fitted value and observed value are equal (the model is well fitted).

H1:-not H0 (the observed value and fitted value are not equal (model is not well fitted)

Decision we don’t reject H0 (since p-value is greater than alpha value)

Conclusion since the p-value Hosmer and Lemeshow Test above is greater than 0.05 then the
observed value and fitted value are equal (our Model is well fitted what we want)
 Classification Tablea
Predicted

Employment status of
Respondent
Percentage
Observed Employed Unemployed Correct

Step 1 Employment status of Employed 65 10 86.7

Respondent
Unemployed 11 51 82.3

Overall Percentage 84.7

a. The cut value is .500

Variables in the Equation

95.0% C.I.for
EXP(B)
B S.E. Wald df Sig. Exp(B) Lower Upper
Step 1a Sex(1) -2.138 .682 9.814 1 .002 .118 .031 .449
Educationallevel 9.273 2 .010
Educationallevel(1) -1.046 .623 2.820 1 .093 .351 .104 1.191
Educationallevel(2) -2.461 .820 9.016 1 .003 .085 .017 .425
Maritalstatus(1) 1.767 .717 6.071 1 .014 5.855 1.436 23.880
Workexperience(1) -2.041 .692 8.712 1 .003 .130 .033 .504
Family income 9.405 3 .024
Family income(1) -1.280 .690 3.441 1 .064 .278 .072 1.075
Family income(2) -2.094 .864 5.881 1 .015 .123 .023 .669
Family income(3) -2.978 1.191 6.249 1 .012 .051 .005 .526
 Jobpreferance 6.482 2 .039
Jobpreferance(1) 1.547 .764 4.095 1 .043 4.697 1.050 21.013
Jobpreferance(2) 1.963 .795 6.102 1 .014 7.120 1.500 33.793
Bussnessadvisoryservice
-1.569 .593 6.994 1 .008 .208 .065 .666
(1)
Constant 2.069 1.204 2.953 1 .086 7.917
a. Variable(s) entered on step 1: Sex, Educationallevel, Maritalstatus, Workexperience, Family income,
Jobpreferance, and Bussnessadvisoryservice.

The result of the binary logistic regression model is presented above table. Currently
unemployed was assigned a value of 1 if the respondents reported unemployed and 0 otherwise.
The reference category of each dichotomously measured independent variable has a value of one
and the values for other categories are compared to that of the reference category. A value less
than one imply that individuals in that category have a lower probability of current
unemployment than individuals in the reference category.

The Wald Chi-Square statistic, which tests the unique contribution of each predictor, holding the
other predictors constant, that is, eliminating any overlap between predictors and we explain
their individual significant effect by Chi-square test in the above. It doesn’t need to declare in
this case.

 -2.138 indicates that the decrease in log odds being unemployment for male is by 2.138
keeping other variable in the model, the odds ratio e−2.138=0.118 indicates that the odds of
being unemployment for male 88.2% [OR=0.118] times less likely to be unemployed
than those female controlling other variable in the model. The 95% confidence interval
also suggests that the odds of being unemployed for male is 0. 031 times as low and
0.449 times as high compared to female. This indicate that the more challenged for
employment opportunity one is female in this kebele.
 -2.461 indicates that the decrease in log odds being unemployment of individual who
have degree education level is by 2.461 keeping other variable in the model, the odds
ratio e−2.461=0.085 indicates that the odds of being unemployed for youth who have
degree education level is 91.5% [OR=0.085] times less likely to be unemployed when we
compare with youth who have grade 10th (less) educational level controlling other
variable in the model. The 95% confidence interval also suggests that the odds of being
unemployed for individual who have Degree educational level is 0.017times as low and
0.425 times as high compared to those individual who have grade 10 th certificate. This
indicates that youth who have less educational level doesn’t get opportunity to be
employed in this kebele.

 1.767 indicates that the increase in the log odds being unemployment of single youth is
by 1.767 by keeping other variable in the model, the odds ratio e 1.767=5.855 indicates the
odds of being unemployment for youth who are not married (single) is five [OR= 5.855
95% CI 1.436-23.880] times more likely to be unemployed when we compare with youth
who are married and have chance of creating their job or by other means in this kebele by
keeping other variable constant in the model. The 95% confidence interval also suggests
that the odds of being unemployed for individual who are not married is 1.436 times as
low and 23.880 times as high compared to those individual who are married in this
kebele.

 -2.041 indicate that the decrease in the log odds being unemployment of who had work
experience is by 2.041 keeping other variable in the model, the odds ratio e−2.041= 0.130
indicates that the odds of being unemployment for youth who had work experience 87%
[OR=0.130] times less likely to be unemployed when we compare with youth who
doesn’t have work experience in this kebele by keeping other variable constant in the
model. The 95% confidence interval also suggests that the odds of being unemployed for
individual who have work experience is 0.033 times as low and 0.504 times as high
compared to those who haven’t work experience in this kebele.
 -2.094 indicates that decrease in the log odds being unemployment of family income 801-
1500 is by 2.094, the odds ratio e−2.094 =0.123 which indicates that the odds of being
unemployment of youth who live in family income between 801-1500 is 87.7%
[OR=0.123] times less likely to be unemployed when we compare with youth who live
with poor family in this kebele by keeping other variable constant in the model. The 95%
confidence interval also suggests that the odds of being unemployed for youth who live in
family income between 801-1500 is 0.023 times as low and 0.669 times as high when we
compare with youth who live with poor family in this kebele

 -2.978 indicates that decrease in log odds being unemployment of family income above
1501 is by 2.978, the odds ratio e−2.978 =0.051 which indicates the odds of being
unemployment of youth who live with rich family (family income above 1501) is 95%
[OR=0.051] times less likely to be unemployed when we compare with youth who live
with poor family in this kebele by keeping other variable constant in the model. The 95%
confidence interval also suggests that the odds of being unemployed for youth who live in
family income above 1500 is 0.005times as low and 0.526 times as high when we
compare with youth who live with poor family in this kebele

 1.547 indicates that increase in the log odds being unemployment of prefer self
employment is by 1.547, the odds ratio e 1.547= 4.697 which indicates that the odds of
being unemployment of youth who prefer self employment one is around five
[OR=4.697] times more likely to be unemployed when we compare with youth who
prefer more paid employment in this kebele by keeping other variable constant in the
model. The 95% confidence interval also suggests that the odds of being unemployed for
youth who prefer self employment one is 0.050 times as low and 21.013times as high
when we compare with youth who prefer more paid employment in this kebele. this
means that youth who can prefer the more paid employment one can have ability to
create their own job and they have own job at the time of survey in this kebele.
 1.963 indicates that increase in the log odds being unemployment of prefer any available
job is by 1.963, the odds ratio e 1.963=7.120 which indicates that the odds of being
unemployed of youth who prefer any available job in the market is around seven
[OR=7.12] times more likely to be unemployed when we compare with youth who prefer
more paid employment in the labor market in this kebele by keeping other variable
constant in the model. The 95% confidence interval also suggests that the odds of being
unemployed for youth who prefer any available job in the market is 1.5 times as low and
33.793 times as high when we compare with youth who prefer more paid employment in
the labor market in this kebele.

 -1.569 indicates that decrease in log odds being unemployment of youth who received at
least once business advisory service is by1.569, the odds ratio e−1.569=0.208 which
indicates that the odds of being unemployed of youth who get Business advisory service
is 79.2% [OR=0.208] times less likely to be unemployed when we compare with youth
who can’t get any business advisory service in this kebele. The 95% confidence interval
also suggests that the odds of being unemployed for youth who get Business advisory
service is 0.065 times as low and 0.666 times as high when we compare with youth who
can’t get any business advisory service in this kebele..
CHAPTER 5

DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1 Discussion

1. Females are less employed than Males

Different researchers (Mlatsheni and Rospabe, 2002; Guracello and Rosati, 2007) noted that
unemployment is more severe for female than for male. The result of this study shows that the
risk of unemployment is higher for female than for male, and thus confirming the stated
hypothesis in the relationship between sex and youth unemployment.

Related to this research our finding also support that 57.4 percent of females and 35.5 percent
males are unemployed one from male and female included in our research. So here in Sabian
kebele, due to low level of education, high responsibility for domestic activities, perception of
females about themselves, lack of entrepreneurship training, and other factors, made females less
employed than males. Thus, the risks of being unemployed for young females in Sabian kebele is
higher than males.

2. Lower educational level of youth related with higher risks of Unemployment

Much has been said about the importance of education for employment. Salvador and Killinger
(2008), World Bank (2009), and Okojie (2003) stated that unemployment rate of less educated
youth tends to be higher as compared to more educated youth. The possible explanation for this,
according to ILO (2004), Okojie (2003), and Hassen (2005) is the lack of knowledge and
employable skills required by the labor market.

Currently our research that we have done in this kebele also reveals that, higher numbers of
unemployed youth have been observed among secondary school students in this kebele. Some of
them completed grade 10, but they did not get any employment opportunity in various socio-
economic sectors of the kebele. At this level of education, they do not have sufficient knowledge,
skills and experience required in the market.

With this low level of human capital, they join the labor market and wasted our productive time.

3. Lack of Business Advisory Services related with higher risks of Youth Unemployment

Access to business advisory services was also found significantly related to youth
unemployment. The service help youth to find jobs, provides access to a work place for
entrepreneurs, skills development, and counseling services (Klugman, 2005). However, lack of
such services increases the likelihood of being unemployed (Haji, 2007). The findings of this
survey indicated that 72.5 percent of youth did not get any form of advisory services. The
deficiency of the service could have a significant impact on youth employment. The regression
analysis displayed the risk of unemployment was higher for those youth who did not get any
form of advisory service as compared to those who had got. Accordingly, this research noted
that:

In this kebele, we have seen that trained youth create their own jobs and work in other
enterprises. However, all of them did not participate in such training or service. Because the
service is not easily accessible, the institution plan for small number of persons and the timing of
the services is not known. Due to such factors, accessing advisory service is difficult in this
kebele.

4) Lower Household economic status related with higher risks of Youth Unemployment

Household economic status is one of the most important determinants of unemployment status
among youth in Sabian kebele. According to our findings, as compared with youth residing in
higher economic status households, the risk of being unemployed for youth in poor households
was highly significant. This finding is consistent with other studies (Bhorat, 2007) showing that
youth of very poor or poor (low economic status) households have the highest rates of
unemployment.

In conclusion, according to the binary logistic regression result, the predictors, sex, educational
level, economic status, marital status, job preference and work experience have (p< 0.05 in all
cases) were found to have a significance effect on unemployment status of an individual in
Sabian kebele.

5.2 Conclusions

Unemployment is one of the challenging socio-economic problems that affect all people in the
working age group. The problem is so severe among the young people in countries of the world,
particularly in the developing countries. The existence of high youth unemployment rate is an
indication of failure in utilizing human capital, which is an important asset for economic
development. Though, the youth are an indispensable asset for economic prosperity and social
security; they have been detached from the labor market, and as a result their energy and talent
have been wasted and their contribution for development is neglected due to social, economic,
and demographic factors. Currently, addressing youth unemployment becomes an important
development and political agenda of several states.

The issue of youth unemployment is the outcome of different socio-economic and demographic
factors. As indicated in the theoretical approach and emphasized in the findings, demographic
factors play a decisive role in determining youth employment. In this vein, from the youth
covered in this study, females are more unemployed as compared to males.

On the other hand, socio-economic characteristics of the youth also contribute to unemployment.
The possession of low human and social capitals reduces the employment of respondents. This
can be inferred from the findings that lower educational level, and limited social network density
significantly increases the likelihood of youth unemployment. That is, unless the youth increase
their education and make education relevant to the labor market, increase their social networks,
unemployment continues to affect them.
The availability of inadequate business advisory services to the young people significantly
influences the employment status of youth. Based on the findings, it is possible to conclude that
the relative risk of unemployment is higher for youth who have no access to the service. Besides,
preferring jobs in the formal sector also affects the employment status of youth.

Generally, demographic factors coupled with socio-economic attributes, reduces the chance of
employment opportunities of the young people. As a result, individuals, families, societies in
particular and the country in general, are expected to pay social and economic costs of youth
unemployment.

5.3. Recommendations

The results obtained from this study are of great concern to policy makers because of the
negative effects of unemployment on the loss of output, on the society and on the psychological
wellbeing of the unemployed youths and immediate family members. In response to this
challenge, this paper suggests the following possible solution to tackle youth unemployment
problem in Dire Dawa in case of Sabian (02) kebele.

 Regarding on sex as one variable that we take, Empower females and increase their
participation. As females are more vulnerable to unemployment, efforts made by the
government and other organization to empower them should be further enhanced and
increase their participation through promoting equal opportunities for young men and
women; organizing them in to cooperatives, and provide credit and training so as to
facilitate their entry into business and entrepreneurship; improving awareness family
heads about females; education and skills enhancement.
 Regarding education as one variable that we take, encouraging youth to improve their
educational level. Achieving higher educational level is found to be significantly related
to lower unemployment risks. This calls for the importance of encouraging the youth to
improve or continue their education. But, for those youth who are unable to continue their
education, government and NGOs should design a strategy such as funding their
education, provide opportunities in government educational institution and, initiate
private educational institutions to give chance for youth.
 Regarding accessing Business advisory service that we take as one variable, Improving
the accessibility and quality of business advisory services. The achievement of getting
productive work is also the functions of quality business advisory services. Thus,
improving the quality and accessibility of the service is indispensable to employment.
One of the ways of improving the accessibility of the services is encouraging NGO’s and
other private institutions to participate in making the service available at lower
administrative level; capacitating the existing service provider institutions through trained
man power, finance and materials.
 Regarding on family income as one variable, the government should take a measure of
action to support the very poor, and to bring about rapid economic growth at the national
level. To this effect, it is important to develop community-based interventions giving
priority to very poor households to participate in the labor market, education, health
facility and areas of job access.
 Regarding exposure to mass media as one variable, The government or concerned bodies
should make the coverage of mass media in uniform way in order to all youth are equally
get information from mass media to get employment opportunity.
 Lastly we recommend that, some of the variables namely Age, social net work density,
family education, and exposure to mass media, were found insignificant in determining
youth employment in the model. Hence, conducting similar research with larger sample
size in general country level will help to further understand youth unemployment in this
kebele.
References

 Adebayo, A. (1999): “Youth unemployment and National Directorate of Employment

and self-employment programs”. Nigerian Journal of Economics and Social Studies 41
(1), 81-102.
 Agresti, A. (2002), Categorical Data Analysis. Wiley Inter science, New York
 Agresti, A. (2007), an Introduction to Categorical Data Analysis. John Wiley and Sons,
Inc, New York
 Bakare A.S (2011). The Determinants of Urban Unemployment Crisis in Nigeria: An
Econometric Analysis Department of Economics, Adekunle Ajasin University, Nigeria.
 Berhanu Denu, Abraham Tekeste and Hannah Van Der Deij (2005), Characteristics and
Determinants of Youth Unemployment, Underemployment, Underemployment and
Inadequate Employment in Ethiopia, Employment Policies Unit Employment Strategy
Department.
 Adebayo, A. (1999): “Youth unemployment and National Directorate of Employment
and self-employment programs”. Nigerian Journal of Economics and Social Studies 41
(1), 81-102.
 Agresti, A. (2002), Categorical Data Analysis. Wiley Inter science, New York.
 Agresti, A. (2007), an Introduction to Categorical Data Analysis. John Wiley and Sons,
Inc, New York.
 Bakare A.S (2011). The Determinants of Urban Unemployment Crisis in Nigeria: An
Econometric Analysis Department of Economics, AdekunleAjasin University, Nigeria.
 The productivity of all activity in economy is strictly reduced during the period of
unemployment(M.Sharp;1992)
 (Albert Achagula;2004), poor utilization of labor force and lead to poor economy;
 (M.Sharp; 1992 and John Solman; 1998): The relationship between their wage and any
Unemployment ;( Samuelson and Nordhals; 1976), CSA; 1987.
 Falae, S.O. (1971) “Unemployment in Nigeria”. Nigerian Journal of Economics and
Social Studies.
 Hosmer, W.D. and S. Lemeshow (2000), Applied Logistic Regression. 2nd Ed., John
Wiley and Sons, New York.
 Serneels, Pieter. 2001. “Unemployment duration in urban Ethiopia.
 Yisak Tafere (2006). Youth Migration and Unemployment: Evidences from Wed Urban
Sities. Addis Ababa.
 World Bank (2009). Africa Development Indicators: Youth and Employment in Africa,
Washington.
 Harris, C. M. (2010). Youth Migration and Poverty in Sub-Saharan Africa: Empowering
the Rural Youth. Journal of Tropical Review Digest, Vol. 1, No.1, PP (167-186).
 Anh, D., Duong, L. and Van, N. (2005). Youth Employment in Vietnam: characteristic,
Determinants and policy Responses. Employment strategy Papers. ILO, Geneva.
 ILO. A skilled workforce for strong sustainable and balanced growth. [Conference] // A
G20 Training strategy. - Geneva: [s.n.], 2011.
 CSA. Urban Employment and Unemployment Survey. [Report]. - Dire Dawa : CSA,
2010
 ILO (1983). International Conference of Labor Statistical report of the Conference,
Geneva.
 Okojie. Employment Creation for youth in Africa: [Book]. - [s.l.]: The gender Dimension
University of Benin, 2007.
 Fadayomi, T.O. (1992). Migration Development and Urbanization Policies in Sub-
Saharan Africa. Codesria Books Series, Ibadan.
  Garson, G. D. (2009). Multiple Regressions: Statistical Notes. North Caroline State
University, North Caroline.
 Kothari, C. (1990). Research Methodology: Methods and Techniques. 2nd Edition.
Wishwa Prakashan, New Delhi.
 SCB (2009). Annual Entrepreneurship Report. SCB. Sabian 02 kebele
 Rahman, I.R. (2004). Employment Route to Poverty Reduction in Bangladesh.ILO,
Geneva.
 UNAIDS (2004). Report of the Global AIDS Epidemic. Geneva
 UN (2003). World Youth Report 2003: The Global Situation of Young People.
Department of Economic and Social Affairs, New York

APPENDIX-A

DIRE DAWA UNIVERSITY

SCHOOL OF NATURAL AND COMPUTATIONAL SCIENCES

DEPARTMENT OF STATISTICS

Dear respondent: The aim of this questionnaire is to collect data for the research
entitled:“DETERMINANTS OF YOUTH UNEMPLOYMENT IN DIRE DAWA TOWN IN
CASE OF SABIAN (02) KEBELE”.

So you are kindly requested to fill the questionnaire sincerely by providing a tick mark (√).In the
space provided.

Thanks in advance for your cooperation!!

1. Sex 1-female 2-male

2. Your Age 1-15-19 2- 20-24 3- 25-29
3. Your Educational level? 1-grade 10th certificate 2- Diploma 3- Degree
 a. Others -----------------------------------------------------------------------------
4. Marital status 1-ever married 2- single
5. Are you employed? 0-Yes 1- no
6. Do you have work experience? 1- No work experience 2- have work experience

7. Your family income per month? 1-Less or equal to 400 birr 2-401-800 birr
3-801-1500 birr 4- above 1501 birr
8. Your Father’s education 1- literate 2- illiterate
9. What type of job do you prefer?1- Preferring paid employment 2-self-employment

3-any available jobs in the labor market

10. Do you have Social network? 1-No social networks 2- social network less than 5

3-social networks 5 and above

11. Which sectors is most create job opportunity to the society in order to decrease
unemployment?
1-Government 2- Private Sector 3- NGO
12. In what way is government affected by unemployment? Loss of income tax
Political instability others ______________________

13. How many times do you watch any mass media?

1- Not at all 2-twice a week 3-twice a week

14. Do you get any training from the Business advisory service in order to get chance of
employment?

1-not received 2-received once