By CPA Baraza William Lucas
The Burden of Unemployment and Underemployment
Unemployment and underemployment are two challenges that continue to plague economies around the world, and Kenya is no exception. These problems have far-reaching consequences that transcend economic parameters and affect individuals, families, communities and the overall social fabric. Recent studies have sought to deepen our understanding of the root causes, far-reaching consequences and potential policy solutions to combat these problems in the Kenyan context.
Causes of unemployment and underemployment
Slow economic growth: A large-scale study conducted by a team of Kenyan economists in 2021 analysed the link between economic growth and employment dynamics. The study revealed a worrying trend of slow economic growth in Kenya, which has subsequently led to a decline in job creation. The interplay between economic expansion and job creation is a central aspect of the unemployment problem.
Skills-Employment Mismatch: The Kenyan Institute for Labour Studies embarked on a comprehensive inquiry in 2022 to delve into the ongoing skills-employment mismatch in the labour market. The study identified a confluence of factors contributing to this mismatch, including the substandard quality of education, limited training opportunities and a significant gap between the skills required by employers and those available in the workforce.
Challenges for the Agricultural Sector: A detailed study commissioned by the Ministry of Agriculture in 2020 sought to understand the declining role of the agricultural sector as a prominent employer in Kenya. This decline has been attributed to a number of factors, including the adverse effects of climate change, the prevalence of pests and diseases, and land fragmentation, which together have eroded agricultural productivity and subsequently reduced employment opportunities in the sector.
Realities in the informal sector: The Kenya National Bureau of Statistics (KNBS) conducted a comprehensive study in 2019 that highlighted the growing influence of the informal sector in the Kenyan economy. However, the study revealed that while the informal sector is expanding, it is characterized by low productivity and limited wages. This aspect presents significant challenges for achieving sustainable livelihoods and addressing underemployment.
Gender Gaps: The Kenya Women and Gender Commission conducted a gender-focused study in 2020 that revealed deep-rooted gender discrimination in the labour market. Unfortunately, women bear the brunt of this inequality and face barriers to access to employment opportunities and fair pay.
Corruption and the business environment: The detrimental impact of corruption on the business environment and subsequent job creation was a central theme of the World Bank’s Kenya Economic Update 2023. Corruption in the public sector creates a hostile environment that inhibits business growth and thus hinders the creation of new jobs opportunities.
Consequences of unemployment and underemployment
Economic Burden: The African Economic Research Consortium (AERC) delved into the economic burden of unemployment and underemployment in Kenya in 2018. Reduced household incomes result in increased levels of poverty, hampering economic growth and broader development efforts.
Social unrest: The potential link between unemployment and social unrest was explored by the Kenya Institute of Public Policy Research and Analysis (KIPPRA) in 2019. The study highlighted those high levels of unemployment can fuel discontent and instability in society, potentially exacerbating existing challenges.
Health and well-being: The Kenya Medical Research Institute (KEMRI) conducted a comprehensive study in 2022 that shed light on the complex relationship between unemployment and mental health. Long-term unemployment is associated with increased stress, anxiety and mental health disorders, highlighting the critical intersection between economic and psychological well-being.
Skills erosion: The Association for Research on Non-profit Organizations and Voluntary Activities (ARNOVA) examined the long-term effects of underemployment in a study published in 2020. The study shed light on the erosion of skills and educational attainment that can occur as a result of long-term underemployment, reducing the employability of individuals.
Erosion of human capital: The African Development Bank (AfDB) highlighted the erosion of human capital due to underutilization of skills in a study conducted in 2021. This phenomenon not only hampers individual progress but also has wider implications for national development potential.
Policy solutions to address unemployment and underemployment
Investing in education and training: The Kenyan Ministry of Education, in collaboration with international development partners, has launched a comprehensive effort to increase the quality and relevance of education. These initiatives aim to equip Kenyan citizens with skills that are in line with the demands of the labour market and bridge the skills-employment mismatch.
Entrepreneurship Support: The Kenya National Innovation Agency (KENIA) is at the forefront of creating a business-friendly environment. By facilitating access to finance, training and market opportunities, Kenya aims to stimulate job creation through the growth of start-ups and small businesses.
Support of the informal sector: KNBS is aware of the importance of the informal sector and, in cooperation with the Ministry of Labour, directs resources to increase productivity and income potential in this sector. Better access to resources, training and infrastructure can uplift informal sector workers.
Eradicating corruption: The Ethics and Anti-Corruption Commission (EACC) remains committed to fighting corruption in the public sector. Transparent governance and curbing corruption can foster an environment conducive to business growth and subsequent job creation.
Empowering Women: Kenya’s Ministry of Gender, Children and Social Development is implementing targeted policies to promote gender equality in the workplace. These policies aim to improve women’s access to employment opportunities and fair wages, ultimately contributing to a fairer labour market.
Global Advocacy: The Kenyan government actively promotes fair trade agreements in collaboration with regional partners such as the East African Community (EAC). These agreements can increase the competitiveness of Kenyan businesses in the global market, which in turn will lead to increased employment opportunities.
The multifaceted nature of unemployment and underemployment in Kenya requires a comprehensive and multifaceted approach. Recent studies have shed light on the complex causes, consequences and potential policy solutions that can shape Kenya’s.
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