Determinants Of Youth Self-Employment In Kenya.

Abstract

Kenya like many other developing countries faces high unemployment rates. The youth are the most affected by the high unemployment especially in Kenya. Various policy interventions have been put in place to create enabling environment for employment creation in Kenya for example the youth enterprise development and uwezo fund. Self-employment is argued to have a high employment creation potential. However, socio-economic and individual determinants of self-employment in Kenya are not clear. The study sought to: first, empirically examine the relationship between self-employment and socio-economic characteristics among the youth in Kenya. Secondly, it sought to examine differences in the characteristics of young men and women in self-employment in Kenya. Using Kenya Integrated Household Budget Survey data for the 2005/2006 we estimate a binary probit model and apply the non-linear decomposition technique so as to establish the male-female gap in self-employment. The results show that education plays a significant role in determining whether one engages in self-employment or wage employment. Access to electricity and piped water also was established to play a significant. Other factors like gender, area of residence, property ownership and age were also found to affect self-employment. Decomposition results revealed that residence, and access to electricity positively contributes to the differential with respect to youth self-employment status while marital status, vocational training, health status and access to piped water contribute negatively to the differential with respect to youth self-employment status.