Causes of Unemployment in Kenya


Date Posted: 5/5/2012 1:11:31 PM

Posted By: rodriguez mwalenga  Membership Level: Silver  Total Points: 110

*High population growth rate: The rapid population growth rate in Kenya is generating rapid growth in the labour force. Such a high population growth rate is incompatible with the available arable land in the rural areas. Hence people tend to migrate in the urban areas in search of jobs. This aggravates unemployment in the urban areas. This problem can be overcome by reducing the high population growth rates using methods used to control population growth.

*Use of inappropriate technology: For developing countries, this is the situation whereby industries continue using relatively capital intensive methods of production instead of labour intensive ones. This is caused by relative factor prices of capital and labour, foreign ownership of firms, etc. This problem can be solved by the creation of incentives to encourage the of labour intensive techniques.

* Lack of Co-operant Factors: This is especially so in the case of capital and skilled labour, which are scarce in most developing countries. Such a problem can be solved through increased capital formation and expanded education and training.

* Capacity Under-utilization: Most firms tend to produce below their capacity, thereby not employing as many people as their capable of. This arises due to lack of sufficient demand of their products. It can also be as a result of monopoly practices that limit output. This can be solved by expanding markets through, for example, export promotion and control of monopoly.

* Global Economic Recession: Recent global economic recessions have reduced the capacity of most economies to reduce unemployment. Kenya is not an exception to this. The problem can be solved through greater international co-operation.

* Seasonal nature of labour demand: Demand for labour in rural areas is mostly seasonal. This is made worse by the general ignorance of the existence of jobs elsewhere as well as by occupational immobility. This creates problems of underemployment and disguised unemployment. The problem can be solved by modernizing agriculture and ensuring continuous production throughout the year.

* Imperfections in the labour market: There are imperfections in the labour market caused by government and trade union interventions. This has tended to distort the labour market by maintaining minimum wages above the market equilibrium. As such, the wage structure in Kenya has failed to co-ordinate demand and supply. This can be solved by allowing a free market mechanism to operate. This might require the removal of wage guidelines.

* Inappropriate education system: The education system in Kenya was preparing people for jobs that were not there. The 8-4-4 system of education is designed to try to overcome this anomaly. It is intended to make people self reliant.

* Regional disparities in development: The disparities in rural and urban development have tended to encourage migration of labour to towns through what is refereed to as rural-urban migration.

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