This Working Paper seeks to provide an overview of the link between employment and poverty in Kenya. Using descriptive statistics and regression techniques, it examines unemployment, underemployment, employment and labour earnings, and the link of all these with poverty. Data are from the unit records of the Labour Force Survey of 1999/99, the latest available data at the time that this paper was written. The paper finds that Kenya faces daunting employment challenges. Unemployment is high and heavily affects urban areas, particularly young workers (15-24 years old) and mature educated workers (55-64 years old). Many of the unemployed are women. In rural areas, the main problem is underemployment, which also disproportionately affects women. Employment is dominated by traditional farming and pastoralists activities in rural areas and by informal activities in urban areas. Productive jobs are limited basically to wage employment, mostly in the modern public and private sectors concentrated in urban areas. Labour earnings are highly differentiated, starting from the high wages of employees in the modern public and private sectors, followed by the earnings of informal-sector workers, and ending with the low incomes of rural traditional farmers. Returns to education are high, very high in the case of tertiary education?suggesting that skills are scarce and highly demanded. The single two most important factors decreasing the probability of being poor are having higher education and having access to a paid job in the modern sectors. The employment landscape corresponds to that of a stagnant economy in which poor workers are in need of short-term social protection and all workers are in need of an effective long-term employment-focused development strategy. Using micro data, the paper simulates two programmes designed to provide income support to poor households: a child-transfer and a job-creation programme. Results suggest that both programmes improve the incomes of the poor and result in significant reductions in the depth of poverty. Simulations indicate that while the child-transfer programme performs better in rural areas, where dependency ratios are higher, the job-creation programme markedly reduces poverty in urban areas, particularly among the extremely poor, and even, surprisingly, among poor female workers.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by International Poverty Centre in its series Working Papers with number
40.
Length: 36 Date of creation: Oct 2007 Date of revision: Publication status: Published by UNDP - International Poverty Centre, October 2007, pages 1-36 Handle: RePEc:ipc:wpaper:40
Find related papers by JEL classification: C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation and Testing J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
This paper has been announced in the following NEP Reports: