Modelling the Determinants of Underemployment Among Youths in Kenya

Abstract

Unemployment is mainly used as the indicator for labour underutilization. Underemployment is higher than the unemployment rate in 65% of the African countries (ILO, n.d.). Kenya’s unemployment rate is 7:4%, underemployment rate- 20:4% (KNBS, 2018). The use of the unemployment aspect to measure the unmet need for employment fails to provide a comprehensive picture of the labour market. There is a need to complement unemployment with underemployment, thus providing a full view of labour underutilization. Understanding the determinants of underemployment by measuring remuneration and time worked as key quality aspects is important to provide crucial information about the state of the labour market indicator for improved analysis. The main objective of this study is to model the determinants of underemployment among youths in Kenya. The study focused on the visible and invisible forms of underemployment among the youths aged 15-34 years. The study utilizes the secondary cross-sectional data obtained from the Kenya Integrated Household and Budget Survey (KIHBS) 2015/16. The response variables for this study are visible underemployment and invisible underemployment. The explanatory variables in this study include gender, education level, age, employment sector, residence and marital status. The binary logistic regression model is used to analyze the data in this study. The study ndings reveal 11:9% of youths in Kenya are visibly underemployed, while 75% of the youths in Kenya are invisibly underemployed. The model ndings show that gender, age categories for 30-34 and 25-29 years, education secondary category, private formal sector, informal sector and residence are signi cant determinants of visible underemployment among youths in Kenya. The results also show that gender, age, education categories (post-secondary, college and post-primary vocational), residence, employment sector and marital status (never married category) were signi - cant determinants of invisible underemployment among youths in Kenya. The ndings inform the need for policy interventions focusing on stimulating the growth of the formal sector, promoting gender equality at work, promoting education and skills enhancements and government enforcement of compliance to minimum wage policy to help address the underemployment problem.