The generation of adequate employment opportunities has remained a top agenda for most governments across the world, most notably among the poorer countries with no unemployment or other welfare benefits. High unemployment remains one of the greatest challenges facing Sub-Saharan Africa today, with the youth bearing the brunt of the burden. High rates of unemployment and underemployment present multiple challenges, such as exacerbation of poverty and delinquency among the youth. According to Kenya’s most recent household survey, the 2005-06 Kenya

Integrated Household Budget Survey (KIHBS 2005/06), the overall rate of open unemployment is estimated at 12.7 per cent, but open unemployment among the youth aged 15-24 is nearly twice as large at 24 per cent. Although measured open unemployment is low, the majority of individuals remain underemployed-or employed in low-productivity jobs-and therefore cannot meet their subsistence needs. Although most of the labour force might be classified as employed (using

the conventional definition of unemployment by the International Labour Organization, ILO), nearly half of the working persons are the ‘working poor.’ Specifically, of those who work 40 or more hours a week, about 46.1 per cent are classified as poor. Among those working between 1 and 27 hours a week, 69.8 per cent live below the poverty line, while among those working 28-39 hours a week, 65.6 per cent are poor. Nearly 65.9 per cent of the labour force without any form of employment live in poverty. There are disparities in the types of employment opportunities available among

the working-age population. A very high proportion of the labour force has little access to quality employment opportunities or decent work.1 Although current studies use hours worked as a measure of underemployment, there is limited analysis on the earnings levels for this category of workers. Even with the increasing unemployment rates and growth in youth popu-

lation, the economy has not been able to create enough jobs to accommodate

the growing labour force. For instance, the economic recovery strategy target of creating 500,000 jobs per year was not met, despite the tremendous GDP growth rates generated by the strategy (Ministry of Labour, 2008). An average of 467,000 jobs were created annually during 2003-07, yet most of these new jobs, over 80 per cent, were created in the informal sector, which is characterized by poor-quality jobs, low earnings, underemployment, personal and property insecurity, and hazardous environments (Manda and Odhiambo, 2003; Manda, 2004). There was a need to create 1 million jobs to absorb the current and new entrants into the labour market. Youth employment prospects in the formal sector have been generally low.

If these prospects are measured by the ratio of the expansion in formal sector employment each year to the number of graduates from the secondary and tertiary institutions, assuming all secondary school graduates join the labour market, only about 19 and 13 per cent of all graduates could have been absorbed in formal sector jobs in 1980 and 1990, respectively. The prospects declined to about 1 per cent in 2000 before rising to about 14 per cent in 2009. Thus, as currently structured, the formal sector may not produce the number of jobs required to absorb the large number of young people entering the labour market annually, even if the target growth rate of 10 per year stated in Kenya Vision 2030 were to be achieved. In order to understand better the functioning of the labour market in Kenya,

besides analyzing open unemployment, there is a need to analyze the quality of work available and the characteristics of the employed and unemployed. There is a need to define ‘decent work’ and to measure the productivity of the working population. One objective of this chapter is to provide a profile of types of jobs in Kenya. The chapter provides a synthesis of the extent of unemployment and underemployment in the country, with special reference to the youth. In addition, the main factors associated with unemployment and the characteristics of both the unemployed and underemployed are analyzed.

6.1.2 Why focus on youth?