Unemployment and Rural-Urban Migration in Ethiopia

Almost 80% of the Ethiopian population is living in rural areas (Central Statistics Agency, 2017). Although the unemployment rate in rural areas is estimated to be around 2% (Ministry of Agriculture and Natural Resources, 2017), majority of rural population is young people with limited access to land and other means of agricultural production and most of them plans to quit agricultural production in near future (Bezu & Holden, 2014) despite rural non-farm employment opportunities are quite limited (Schmidt & Bekele, 2016). The lack of job opportunities in rural areas is among the core reasons of migration of young people to urban areas (Atnafu, Oucho, & Zeitlyn, 2014). According to a recent study by IFPRI, 28% of the young people in the Blue Nile Basin in Amhara and Oromia have permanently migrated to the urban areas between 2010-2014 (Kosec, Ghebru, Holtemeyer, Mueller, & Schmidt, 2017). However, an already high rate of unemployment in the urban areas with 16.5% (Ministry of Agriculture and Natural Resources, 2017) indicates that those who move to the cities for better job opportunities face significant constraints in finding jobs. The aim of this paper is to analyse the impact of the RJOC strategy on the Ethiopian economy and to develop policy recommendations for the prioritization of government investments. To this end we will first present a qualitative analysis of the RJOC strategy based on a series of in-depth interview and focus group discussion with the officials from MoANR and other concerned bodies, a review of best practices from other countries experience and an assessment of existing policies and strategies related to job creation and migration. Then we will employ a country level CGE model to quantify the impacts of RJOC strategy by using a recently developed SAM for 2014.