Labor Market Assessment of the USAID Development Food Security Activity (DFSA): “Strengthen PSNP4 Institutions and Resilience (SPIR)”

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Labor Market Assessment of the USAID Development Food Security Activity (DFSA): “Strengthen PSNP4 Institutions and Resilience (SPIR)” Labor Market Assessment of the USAID Development Food Security Activity (DFSA): “Strengthen PSNP4 Institutions and Resilience (SPIR)” Development Technicians LLC, USA NOVEMBER 2018 DISCLAIMER The author’s views expressed in this publication do not necessarily reflect those of World Vision and the United States Agency for International Development (USAID) or the United States Government LABOR MARKET ASSESSMENT, SPIR, NOVEMBER 2018 Table of Contents 1. Introduction .................................................................................................................... 3 2. Objectives ....................................................................................................................... 4 3. Methodology .................................................................................................................. 5 4. Limitations ...................................................................................................................... 8 5. Findings .......................................................................................................................... 9 5.1. Amhara Region .................................................................................................................... 9 5.2. Oromia Region .................................................................................................................. 16 5.3. National Level .................................................................................................................... 21 6. Analysis and discussion ................................................................................................. 24 6.1. Amhara Region .................................................................................................................. 24 6.2. Oromia Region .................................................................................................................. 28 6.3. National Level .................................................................................................................... 31 7. Recommendations ........................................................................................................ 33 7.1. Self-Employment ............................................................................................................... 33 7.2. Wage-Employment ............................................................................................................ 34 7.3. Access to Finance Resources .............................................................................................. 35 7.4. Strategic Initiatives ................................................................................................................ 35 Annex 1 – Labor Market Assessment Terms of Reference .............................................................. 36 Annex 2 – Bibliography .................................................................................................................. 45 Annex 3 – Primary survey schedule ................................................................................................ 46 List of Tables Table 1 – Areas covered as part of this assessment …………………………………………………….. 4 Table 2 – Summary of overall interviews conducted …………………………………………………… 6 Table 3 – Summary of national level interviews conducted …………………………………………... 7 Table 4 – Summary analysis for the Amhara Region ………………………………………………….. 25 Table 5 – Summary analysis of the Oromia Region …………………………………………………… 28 Table 6 – Summary analysis at National level ………………………………………………………….. 31 LABOR MARKET ASSESSMENT, SPIR, NOVEMBER 2018 i List of Figures Figure 1 – Ethiopia GDP Annual Growth Rate …………………………………………………………. 3 Figure 2 – Major occupational categories ……………………………………………………………….. 3 Figure 3 – Education and Literacy Rates ………………………………………………………………… 4 Figure 4 – Primary income sources (female respondents) – Amhara ……………………………... 10 Figure 5 – Challenges to income earning (female respondents) – Amhara ………………………. 11 Figure 6 – Primary income sources (male respondents) – Amhara ……………………………….. 12 Figure 7 – Challenges to income earning (male respondents) – Amhara ………………………… 12 Figure 8 – Local business responses (Amhara) ………………………………………………………... 13 Figure 9 – Opportunities for income earning (government responses) – Amhara ……………… 14 Figure 10 – Primary income sources (female respondents) – Oromia ……………………………. 16 Figure 11 – Challenges to self employment (female respondents) – Oromia ……………………. 16 Figure 12 – Primary self employment sources (male respondents) – Oromia …………………... 17 Figure 13 – Challenges to self employment (male respondents) – Oromia ……………………… 17 Figure 14 – Local business responses (Oromia) ………………………………………………………. 19 Figure 15 – Income earning opportunities (Government responses) – Oromia ………………… 19 LABOR MARKET ASSESSMENT, SPIR, NOVEMBER 2018 ii ACRONYMS ACSI Amhara Credit and Savings Institution DFSA Development Food Security Activity DHS Demographic and Health Survey DOT Digital Opportunity Trust EDC Education Development Center EPMES Ethiopia Performance Monitoring and Evaluation Service FGD Focus Group Discussion FTC Farmer Training Center GBV Gender Based Violence GDP Gross Domestic Product GoE Government of Ethiopia IGA Income Generating Activity KII Key Informant Interview LMA Labor Market Assessment LOA Life of Award NGO Non-Governmental Organization OCSICO Oromia Credit and Savings Institution PSNP Productive Safety Net Program SME Small and Medium Enterprises SPIR Strengthen PSNP4 Institutions and Resilience ToR Terms of Reference TVET Technical and Vocational Education and Training LABOR MARKET ASSESSMENT, SPIR, NOVEMBER 2018 iii SUMMARY Ethiopia is among the fastest growing non-oil economies in the world. Although Ethiopia has been advancing at an impressive rate, the gains are not being equally seen across the country. The rural population continue to rely on traditional livelihood means and have not equally benefited from the industrialization taking place primarily in and around the capital and other large cities of the country. On-farm income remains dominant with 61.8 percent of women in Amhara and 76.8 percent of men relying on agriculture related activities as their primary source of income. In Oromia, similarly, agriculture income is the primary profession with 41.1 percent of women and 79.0 percent men engaged in this activity. Education and literacy are two prominent factors why industry is reluctant to move to the remoter rural areas of Ethiopia, as they prefer a minimum standard of learning in their employees to enable easier training and oversight of these individuals. For the purposes of this Labor Market Assessment (LMA), a comprehensive desk review, together with primary surveys in six woredas across Amhara and Oromia were conducted. A total of 22 Key Informant Interviews (KII) were performed with female community respondents, 20 KIIs with male community respondents, 21 KIIs with local businesses, and 45 KIIs with respondents representing different support structures. Similarly, 11 Focus Group Discussions (FGD) were conducted with female community respondents and 12 FGDs with male community respondents. In total the SPIR LMA completed 108 KIIs and 23 FGDs. The majority of the documents reviewed were studies and assessments performed at national or regional levels, and very little was found with regards to “local” information of the six woredas where primary surveys were conducted. The major findings from the surveys were as follows. Female youth across the sampled woredas in Amhara and Oromia were predominantly engaged in traditional self-employment activities including petty trade, running small coffee shops, rearing poultry and trading eggs, and fattening livestock. There also appeared to be a greater proportion of women involved in the chat trade in Oromia, and in producing and selling beer in the Amhara region. Working as house-maids in nearby towns was the only source of wage-employment that was identified in Amhara, and even fewer opportunities for women in Oromia. The responses from women were similar when it came to how they thought local businesses viewed women. Responses included that generally businesses were open to taking on female employees but felt that women lacked energy and the skills necessary for them to be employed in their business. In the area of self-employment, women shared that one of their primary impediments was not being able to access finances. Male youth were predominantly engaged in traditional self-employment activities including on- farm activities of rearing poultry and trading eggs, agriculture, and fattening livestock. The chat trade was also popular in Oromia. Off-farm activities included petty trading, running small cafes and restaurants, and weaving and tailoring. Male respondents felt that local businesses viewed male youth as being hardworking and energetic. In the area of self-employment, access to credit was universally considered to be the major obstacle. The local economy in Oromia was found to be considerably poorer than in Amhara. All businesses interviewed in Amhara were willing to take on interns to train youth and said that they would not discriminate between taking on a female or a male employee. However, the few businesses that were found in Oromia had a poor impression of youth, but were willing to take on interns and provide on-the-job training. The most important attributes and skills businesses LABOR MARKET ASSESSMENT, SPIR, NOVEMBER 2018 1 sought were experience,
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