Youth Unemployment in Kenya

Youth unemployment is one of the most pressing social and economic problems that less developed countries face today. Yet little is known about how best to smooth the school-to-work transition or to boost human capital for those not on the academic schooling track. Vocational education is one promising avenue for addressing the problem. However, few existing rigorous studies of vocational training in developing countries evaluate Latin American programs, and such studies neglect entirely programs in Africa, the world’s poorest region where the youth unemployment problem is particularly severe. Kenya, like many African countries, suffers from particularly high youth unemployment. A national household survey conducted in 2005 found that approximately 21% of youths aged 15-29 were unemployed, and a further 25% were neither in school nor working. Along with the economic ramifications, high unemployment can have significant social consequences; a recent World Bank report showed that the majority of violent acts during the post election crisis in Kenya were perpetrated by underemployed youth. This project will evaluate the impacts of a vocational education voucher program among Kenyan youth, using a randomised controlled evaluation design together with an innovative panel dataset. It will explore whether subsidised vocational schooling can enable the unemployed and those with little formal schooling to move into new and higher-paying occupations, which are often found in cities. In particular, the project will examine effect of vocational training on formal sector employment, labour market earnings, migration decisions, remittances, fertility decisions and other major life outcomes. The results of this study will inform governments, policymakers, and donors of the economic returns to vocational education, allowing them to improve the effectiveness of such programs in Africa. The unusual panel dataset, which tracks respondents wherever they move within East Africa, will also provide new insights into how human capital investments affect out-migration decisions and remittances back to the sending area, allowing measurement of the “returns” to public educational investments from the perspective of a local government authority. Moreover, this research design will provide an assessment of vocational education’s potential to reduce or exacerbate inter-regional economic inequalities through migration and remittances. The project is also designed to examine the different returns of private sector vocational training relative to public sector training. The Kenyan context provides an excellent opportunity to examine both private and public vocational institutions since both are numerous in the country. However, despite the rapid recent expansion of the private vocational sector in Kenya, there is little systematic evidence on the differences in instructional quality, student composition, or later labour market outcomes between public and private institutions. Finally, a baseline “information intervention” carried about by the NGO providing the vouchers, which emphasised the potentially large returns to vocational education, especially for women, will shed light on how information provision affects the demand for vocational schooling across different demographic groups.