Federal Democratic Republic of Ethiopia

Labour
Market
Intelligence
(LMI) in Ethiopia

April 2022
I
 ACKNOWLEDGMENT
The Ministry of Labor and Skills would like to thank the following people for their special contributions to
the preparation of this report.

1. H.E. Muferihat Kamil, Minister, Ministry of Labor and Skills

2. H.E. Nigussu Tilahun, State Minister for Labor and Employment Affairs, Ministry of
Labor and Skills

3. Yoseph Sartie, Director, Data Analytics and System Directorate

4. Dagmawi Kebede, Manager, Data Analytics and System Directorate

5. Dr. Aregawi Gebremedhin, Labor Economist Advisor to Data analytics and System
Directorate

6. Biruk Degefe, Senior Data analyst, Data Analytics and System Directorate

7. Tseganew Temesegen, Senior Data Analyst, Data Analytics and System Directorate

8. Getachew Bayeh, Senior Data Analyst, Data Analytics and System Directorate

9. Robel Melaku, Data Analytics Advisor, Data Analytics and System Directorate

10. Teshome Adno, Senior Data Analyst, Data Analytics and System Directorate
Cont ent s Page N o.

List of Tables IV

List of Figures V

Executive summary VII

1. Introduction

2. The Demand Side of the Market

2.1. Enterprise Registration 8

2.2. Online Vacancies 8

III

Page N o.

Contents
3. Supply Side of the Market
Page N o.

List of Tables
12 IV

List of Figures V

Executive summary VII

1. Introduction
3.1 Jobseekers’ Profile—etworks
1
12
2. The
3.2
Demand Side of the Market
Profiles of Registered Graduates
4
15
2.1.
3.3
Enterprise Registration
Education Enrollments—Potential Future Labor Supply
4
17
2.2. Online Vacancies 8

4.3. SupplySector
Public Side of the Market
Employment 12

3.1 Jobseekers’ Profile—etworks 12

3.2 Profiles of Registered Graduates 15

3.3 Education Enrollments—Potential Future Labor Supply

19 17

4. Public Sector Employment 19

5. Private Sector Employment 22

6. Impact of COVID-19 26
5. Private Sector Employment
7. Conclusion 30

8. References 32

22

6. Impact of COVID-19 26

7. Conclusion 30

8. References 32

IV
List of Tables
Table 1: Enterprises by sector and size 7

Table 2: Enterprises by region and initial capital 7

Table 3: Regional distribution of online jobs 11

Table 4: Type of online jobs advertised 11

Table 5: Jobseekers registration by region 12

Table 6: Age categories of registered jobseekers 13

Table 7: Educational status of jobseekers 14

Table 8: Enrollments by levels of education and gender 17

Table 9: Primary completion and dropout rates by region 18

V
 List of Figures
Figure 1: The process of obtaining LMI  1

Figure 2: Number of business establishments by year and size 5

Figure 3: Jobs by the online platform advertising agencies   8

Figure 4: Jobs by sector/field of study   9

Figure 5: Jobs by years of experience   10

Figure 6: Gender of the registered jobseekers  13

Figure 7: Employment status of the jobseekers  14

Figure 8: Gender distribution of graduated jobseekers.  15

Figure 9: Educational qualifications of graduated jobseekers.  15

Figure 10: Regional distribution of graduated jobseekers  16

Figure 11: Field of studies of graduated jobseekers  16

Figure 12: Enrollments by region  18

Figure 13: Public sector employment by gender  19

Figure 14: Total number of employees and growth rate of employment   20

Figure 15: Number of public sector employees by levels of education  20

Figure 16: Public sector employees by age group  21

Figure 17: Total number of employment by sectors  23

Figure 18: Total number of employment by region  23

Figure 19: Sectoral distribution of total employment by year  23

Figure 20: Sectoral distribution of total establishments by year  24

Figure 21: Average number of jobs per firm by sector  24

Figure 22: Average salary of private sector employees by sector  25

Figure 23: Regional, sectoral and gender distribution of firms  26

Figure 24: Did the firm face any operation decline in the last 1 year 27

Figure 25: Percentage of firms that laid of their workers in the last one year  28

Figure 26: Measures taken by firms to mitigate the impacts of COVID-19  29

VI
Acronyms
COVID-19 — Coronavirus Disease 2019

CSC — Civil Service Commission

ICT — Information and Communication Technology

ISIC – International Standard Industrial Classification

ILO — International Labour Organization

JCC — Jobs Creation Commission

JEDI — Jobs Enablement and Data Interoperability

LMI — Labour Market Intelligence

LMIS — Labour Market Information System

MoE — Ministry of Education

MoLS — Ministry of Labour and Skills

MoSHE — Ministry of Science and Higher Education

MoTI — Ministry of Trade and Industry

MSE — Micro and Small Enterprises

OSSC — One Stop Service Centers

POESSA — Private Sector Employees Social Security Agency

SNNP — Southern Nations, Nationalities and People

TVET – Technical and Vocational Education and Training

VII
 Executive summary
Ethiopia is a youthful country where nonemployment could heavily impact its socio-economic
and political atmosphere. Realizing the potential challenges, the government has proactively
established the Ministry of Labor and Skills (MoLS) with a term to lead, coordinate and support
the job creation agenda through a robust Labor Market Information System (LMIS). MoLS is
also mandated to enhance job creation opportunities and enable the training and education
sector to produce qualified manpower and innovative start-ups.

This Labor Market Intelligence (LMI) report provides labor market insights by considering the
demand and supply side as well as the employment linkages of the labor market. This report
bases the administrative data coming from different stakeholders. The demand side of the labor
market is analyzed using the aggregated online vacancies and the Ministry of Trade and Industry
data. The data shows that most vacancies are in business and finance and require some level
of experience. While the trade sector dominates in terms of total employment in the private
sector, it, however, has the lowest employment creation.

From the supply side, the jobseekers’ profile and students’ educational enrollment data tell us
that most are young jobseekers and secondary school complete (primary or secondary school
dropouts). They, therefore, do not meet the requirements of most job vacancies, which necessitate
university education and some work experience.

From the establishments’ perspective, most are micro-enterprises and engaged in the trade sector.
This report also discusses the impact of COVID-19 on businesses most of which remarked
disrupted operations and lay off their employees. We hope this LMI report inspires further
research into more areas of the labor market to understand its intricacies and recommend policies
and actions to deal with them.

VIII
1. Introduction

Labor Market Intelligence (LMI) refers to the

explicate and interpreted information about
labor market indicators. Figure 1 depicts how
to use different kinds of labor market data
as inputs; then the features are analyzed and
organized, and eventually, the indicators will
be presented and considered to process sense
for the final consumers.

Figure 1: The process of obtaining LMI

Input Process Output

Labour
Labor Market Data
(hard and soft) Market
Intelligence

Labor Market Analysis

Source: Adapted from a roadmap for the development of LMIS by Srenson and Mas (2016)

The labor market encompasses and is examined from the demand side, supply side, or both.
The supply side of the market comprises the characteristics, skill composition, and work
consent of the labor force. The demand side of the market consists of the number and type
of jobs available, skills in demand, the sectors, locations, and other necessitate of employers.

LMI, an emerging concept, described as the design and exercise of intelligent algorithms and
frameworks to analyze data related to the labor market for supporting policy and decision-making
(Mezzanzanica and Mercorio, 2019).

LMI report requires an in-depth assessment of the multifold functions, needing a

different stock of dataset s. It helps to observe the state of the labor market and
provides important insight for the way forward. However, this report will try to use the
available datasets and might serve as an initiative for further detailed LMI studie s.

1
The main establishment of the Ministry of Labor and Skills (MoLS) is to:

Develop a Coordinate
robust Labor and support the
Market Information job creation efforts of
System (LMIS) that
the Federal and
enables job seekers,
employers, and Regional public
policy makers institutions and the
private sector

Enable the
training and
education sector to
produce qualified
graduates with skills
and ethics that fit
into the labor
market

Promote and Mobilize

support resources and
innovations, innovative
entrepreneurship investments that
programs and support start-ups,
engagement of the enterprises and job
private sector for creation programs
job creation

Lead and drive the

job creation agenda in
Ethiopia

Ensure the
adoption and
implementation of
pro-employment
policies
across sectors

MoLS had attempted to analyze all sides of the labor market in its first LMI report. In the previous
report, the main aspirations were to understand the demand side of the labor market, explore
the supply side of the labor market, and examine the employment characteristics in the private
and public sectors. In this version, we try to provide basic information about both sides of the
market; the general objective is to give insights regarding the labor market condition of Ethiopia.

2
The main intent of producing this report include:

1 3
To understand the To explore the
type of skills in supply of labour and
demand the general skills
and the requirements they are equipped
there of with

2 4
To examine private To understand the
and public sector types and numbers
employment and of business
the general establishments in
characteristics of the past 10 years
employees

The collected information in this report are from different government

and private organizations. The demand side of the market’s data is
gathered from the Hahu Jobs vacancy job aggregator and the Ministry
of Trade and Industry (MoTI). The former side fuses vacancies posted
online, while the latter provides the number and characteristics of
business establishments. Taking the supply-side data from the Ministry
of Education (MoE) and Ministry of Science and Higher Education
(MoSHE) coupled with the jobseekers list registered by the etworks.

Moreover, the analysis used statistic from the Private Employees Social
Security Agency (POESSA) for the private sector employment. Since
the handful of data available might be missing for some regions or
industries, this report requires to perceive, cautiously. For instance,
the vacancy aspect is from online jobs aggregators, which naturally
are concentrated in Addis Ababa.

Jobs Enablement and Data Interoperability (JEDI) is a project aimed

at fusing labor market data including surveys, administrative data, and
routine datasets that would clarify the efficiency of the labor market
functioning. All the data collected from different agencies organized
and examined through the JEDI platform, JEDI helps to get labor
market data and insights melded into one place, including the demand
and supply sides. Thus, though the data are from different institutions,
while the analysis is on the integrated datasets in the JEDI platform.

3
2. The Demand Side of the Market

The demand for labor, an originated requirement

in the sense that industries need labor input to
conduce goods and services. Thus, the businesses’
motive of earning profit brings the demand for
labor into play, heightening the improvement of
MSMEs, which lowers nonemployment.

In Ethiopia, the government has put effort to endorse the development of MSEs—by adopting
MSE strategy including (i) skill training; (ii) marketing support; (iii) access to finance; (iv) production
support; (v) single centre support supply, and (vi) access to work premises support.

The MSE program, despite the huge resources dedicated to it, faced vital challenges making its
performance scarce. Thus, it’s important to highlight the number of business establishments, and
the general characteristics of these businesses. Efficient labor market refereeing helps to build
a well-functioning labor market. Although the labor market linkage in Ethiopia is vulnerable; the
public employment services made few linkages. Since the majority of the jobseekers lack information
about jobs, MoLS is planning to construct convenient employment services by creating job centers
paving the way for building effective labor market linkages.

In this report, we try to understand the number and attributes of ventures in Ethiopia to portray
the general business environment. Besides, we also mention the nature of online vacancies in
the past two years. Thus, the first section is devoted to the conversation on the characteristics of
enterprises, while the second part discusses the nature of online openings from the Hahu jobs data.

2.1 Enterprise Registration

The Ministry of Trade and Industry (MoTI) granted about 2.6 million licenses starting from
2011 until January 2021, and gave 14,500 licenses in January alone. In this report, we try to
understand the nature and characteristics of establishments.

Figure 2 shows that the number of establishments has been growing since 2011, except
showing a decreasing trend in 2016 and 2018. In 2020, more than 380 thousand licenses
had been issued indicating businesses are flourishing and self-employment is also
increasing, expected to pull up wage employment.

4
Figure 2: Number of business establishments by year and size

Micro Small Medium Large

400,000

350,000

300,000

250,000
Establishments

200,000

150,000

100,000

50,000

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Year

Source: Own computation based on MoTI data

Apart from the business establishments, the sectors where these businesses are booming
matter for the country’s economic growth, especially in terms of the employment potential
of the sectors. As per MoLS’s classification (based on ISIC and MoTI), the sectors are nine,
including Agriculture, Mining and quarrying; Manufacturing, Construction, Tourism,
and Arts; ICT and digital works, Logistics and Communication, Services, and Trade.

The Trade sector dominates the business establishments followed by Service and Logistics,
Transport and Communication sectors. Another important sector that needs to be discussed is
the size of the enterprises establishments. Classification of business establishments reasons their
capital during registration, thus micro, small, medium, and large enterprises. The international
definition for enterprise bases on three criteria used jointly or separately: the number of employees,
paid up capital and sales turnover. However, for Ethiopia, the revised enterprise definition is on
the number of employees and total assets.

5
 The typology of this report bases solely on capital, since the number
of employees is missing in the MoTI data. Accordingly, classification
enterprises in the industry sector (Agriculture, Mining and Quarrying,
Manufacturing, Construction, and Tourism and Arts) are as micro if their
capital is less than or equal to birr 100,000; small if their capital exceeds
birr 100,000 and less than birr 1.5 million; medium if capital is greater
than birr 1.5 million and less than birr 20 million, and if capital is more
than birr 20 million, large.

However, enterprises (ICT and Digital works, Logistics, Transport and

Communication, Services, and Trade) are micro if capital is less than or
equal to birr 50,000; small if capital is greater than birr 50,000 and less than
or equal to birr 500,000; medium if capital is greater than birr 500,000 and
less than or equal to birr 5 million, and if capital is greater than birr 5 million,
large. Table 1 presents the number of establishments by size and sector
of the enterprises during registration.

Accordingly, of the businesses established since 2011, about 71% of

the establishments are micro enterprises followed by a small, which is
19%. The share of large corporations is tiny, constituting about 2% of
the total establishments. In terms of sectoral distribution involvement
is about 65% in the Trade sector followed by Logistics, Transport
and Communication sector which is about 14%. While only 4% of the
establishments are engaged in the manufacturing sector. It is informative
to examine the number of establishments by geographic distribution.
Table 2 shows the distribution of establishments since 2011 by region
and size of the enterprises. Accordingly, Amhara region followed by
Addis Ababa has the highest share of business establishments - 30%
and 29% respectively. The type of enterprise, however, about 5.5% of
the enterprises in Addis Ababa are large enterprises, and of the total
large enterprises, 73.5% are in Addis Ababa. Regarding the average
initial capital, it was about ETB 12.7 billion; it significantly varies across
regions, with the highest average initial capital being in the Tigray
region (about ETB 82.9 billion) followed by the Oromia region (about
ETB 21.6 billion).

6
Table 1: Enterprises by sector and size

Micro Small Medium Large Overall

Sector
No. % No. % No. % No. % No. %

Agriculture 35,827 79.4 7,245 16.1 1,559 3.5 498 1.1 45,129 100.0

Mining and
quarrying 928 72.3 185 14.4 138 10.7 33 2.6 1,284 100.0

Manufacturing 77,223 78.9 11,925 12.2 6,065 6.2 2654 2.7 97,867 100.0

Construction 67,472 70.3 19,579 20.4 7,032 7.3 1903 2 95,986 100.0

Tourism and
43,523 89.3 3,604 7.4 1,312 2.7 318 0.7 48,757 100.0
Arts

Logistics,
transport and 83,120 26.1 195,318 61.2 36,935 11.6 3660 1.1 319,033 100.0
communication

Services 163,892 79.3 23,755 11.5 15,232 7.4 3744 1.8 206,623 100.0

Trade 1,165,410 78.9 171,729 11.6 103,149 7 36761 2.5 1,477,049 100.0

Total 1,637,395 71.4 433,340 18.9 171,422 7.5 49571 2.2 2,291,728 100.0

Source: Own computation based on MoTI data

Table 2: Enterprises by region and initial capital

Region where
Initial capital % of large
business is No. %
(ETB) enterprise
located

Addis Ababa 658,567 28.7 609,073,221.7 5.5

Amhara 677,440 29.6 2,271,080,842.2 0.4

SNNP 171,224 7.5 857,103,258.9 0.7

Oromia 485,656 21.2 21,610,245,226.9 1.1

Tigray 199,219 8.7 82,889,225,616.7 1.3

Benishangul
67,320 2.9 1,908,740.5 1.7
Gumuz

Somali 15,033 0.7 1,111,789.5 1.7

Harari 12,755 0.6 652,710.2 0.9

Afar 3,780 0.2 4,725,384.2 4.5

Gambela 734 0 76,517,363.4 4.6

Total 2,291,728 100 12,695,579,433.7 2.2

Source: Own computation based on MoTI data

7
2.2 Online Vacancies

Among the several online job advertisers in Ethiopia, Hahu Jobs, has designed an impressive
work that aggregates all the jobs posted online. The main purpose of the job aggregator is to
summarize all job vacancies by sectors, subsectors, position, and years of experience. This gives
us a snapshot the number of jobs advertised in a period, and the sectors with high concentrations
of vacancies and positions/fields in high demand. However, the interpretation should be cautiously
generalized since the consideration is only for a handful of the job vacancies. As per the Hahu jobs
aggregator, about 38,021 jobs were advertised on the online platform in the last two years—June
1, 2019, until May 31, 2021. In the past 2 years, the average number of jobs posted per day is 60.3.

The jobs are posted in different vacancy announcement platforms including Ethiopian reporter,
Ethiojobs, Hahujobs, Ezega, Etcareers, Malefiyajobs, Zionjobs, Glassdoor, and Linkedin. Ethiojobs
also includes advertisements for public sector vacancies. Figure 3 depicts the share of jobs
announced by online advertising agencies in the last year. Ethiopian reporters have the largest
share of the online vacancy announcements about 45.03% followed by Ethiojobs with about 31.13%.
What makes it unique is that it also has a weekly news magazine including the lists of vacancies,
making it more accessible to the community. Ezega and Etcareers have also announced significant
numbers of jobs in the past two years.
Figure 3: Jobs by the online platform advertising agencies

50
45.03

40

31.07

30
ethiopian-reporter

ethiojobs_public
Percentage

malefiyajobs

glassdoor

addisjobs
ethiojobs

etcareers
hahujobs

geezjobs

linkiedin
zionjobs

icanjobs
ezega

20

10.47

10 6.46
4.17

1.48 0.64 0.37 0.18 0.06 0.05 0.02 0.00

Online platforms

Source: Own computation based on Hahu Jobs data aggregator

8
 Figure 4 reveals he share of vacancies advertised in the last two years, from June
1, 2019, until May 31, 2021. As can be seen from the figure, advertisement of the
maximum share was in Business and Finance sector followed by vacancies around
Engineering. Low and medium-skilled labor (9%) and Health care (7%) related
jobs have also fair shares of the total vacancies. Besides, social science, transport
and logistics, and ICT were also in the table ground of job advertisements which
constitutes about 6%, 4%, and 4% of the total job advertisement in the last nine
months respectively. On the other end, however, the non-profits, security, and
manufacturing sectors had very low shares of the total employment with less
than 1% of the total shares.

Figure 4: Jobs by sector/field of study

43.14 Business and Finance

13.9 Engineering
9.17 Low and medium skilled worker
7.41 Health care
5.81 Social Science
Fields of education

4.31 ICT
4.23 Transportation and Logistics
2.48 Natural Science
2.39 Education
2.28 Legal Services
2.13 Hospitality
1.65 Creative Arts
0.64 Security
0.35 Manufacturing
0.1 Non-Profit / Volunteer

0 10 20 30 40 50

Percentage

Source: Own computation based on Hahu Jobs data aggregator

Experience is the major component that employers usually require when they advertise jobs.
Figure 5 depicts the years of experience that employers required in their vacancy announcements
in the last two years. As can be seen from the figure, only about 6% of the total jobs require
fresh graduates, while more than 88% of the jobs, require 2 and more years of experience.

Besides, the average years of experience for a new job is about four years. The fact implies
that the window for entrants is very limited; the demand for individuals with no experience
is very low, making entry into the labor market considerably difficult. If entry into the labor
market is easy, then the youth who finished their training and aspiring to get professional
experience would get that professional experience; equipping them for tomorrow’s labor
market (Gammarano—ILO, 2019).

9
Figure 5: Jobs by years of experience

25

22.65

20

15 14.55

13.59
12.85
Percentage

9.9
10

6.60
5.88 6.02

5
3.94

2.42

1.21
0.32

0
0 1 2 3 4 5 6 7 8 9 10 >10
Years

Source: Own computation based on Hahu Jobs data aggregator

The online vacancy announcements are concentrated in urban areas where

people have access to the internet and the ability to use computers and
smartphones to browse over the interne t. Figure 6 shows the geographic
distribution of online jobs across regions in the last two year s. Addis Ababa
summoning 67% of the jobs, followed by Oromia region about 5.4% of the jobs,
and Amhara region with about 1.9% of the jobs advertise d. Not identified jobs
are 20%, indicating the percentage share in Addis Ababa could further ris e.

The high and recent generation of internet access in the capital, Addis Ababa,
made high concentration of online jobs. Being the hybrid of economic activities
in and around the capital and being a seat for diplomatic and other international
organizations played the role too.

10
Table 3: Regional distribution of online jobs

Region No. %
Addis Ababa 25,187 66.80

Oromia 2,025 5.37

Amhara 703 1.86

Benishangul Gumuz 104 0.28

Tigray 427 1.13

SNNP 576 1.53

Dire Dawa 189 0.50

Gambella 275 0.73

Somali 388 1.03

Afar 102 0.27

Sidama 122 0.32

Unidentified 7606 20.17

Source: Own computation based on Hahu Jobs data aggregator

Another feature of online jobs is the type of job advertised. Table 3 shows the online jobs
advertised by type of work. The data shows that about 89 percent of the jobs are full-time jobs
and about 8 percent are contract-based jobs, while the rest include internships, part-time and
other types of jobs. In terms of job quality, most of the online jobs are full-time jobs, which
makes them better in the eyes of the jobseekers.

Table 4: Type of online jobs advertised

Type of advertisement No. %

Full-time 33,966 89.33

Contract 3,213 8.45

Other 625 1.64

Internship 114 0.30

Part-time 74 0.19

Bid 29 0.08

Total 38,021 100.00

Source: Own computation based on Hahu Jobs data aggregator

11
3. Supply Side of the Market
3.1 Jobseekers’ Profile—etworks

MoLS, while it used to be the Jobs Creation

Commission (JCC), has developed a mobile
app – etworks – to register jobseekers and
get them linked to a job using the One Stop
Service Centers (OSSCs). In the first phase,
the app was sent out to all the OSSCs in Addis
Ababa, Dire Dawa, and Harari, together with a
tablet installed with the required apps to get
the data directly when registration is complete.
But it also tries to expand the etworks app to
the rest of the regions. In the previous LMI report, registration from Nov 2019 until April
2020 was about 12,000 jobseeker s. However, in the online etworks app, from Nov 2019 to
Oct 2021, registered jobseekers were more than 167,00 0. Knowing that registration has
been running mainly in Addis Ababa and later in Dire Dawa and Harari, some registrations
seem to have also been observed in the rest of the regions. Accordingly, as can be seen
in Table 5, the rest of the regions apart from Addis Ababa, with a majority in Dire Dawa
registered 5.5 %. About 94.5% of the total jobseekers reported to be from Addis Ababa,
indicating that the online jobseeker’s registration is mainly restricted to Addis Ababa.

Table 5: Jobseekers registration by region

Region No. %
Addis Ababa 157,868 94.50

Afar 3 0.00

Amhara 276 0.20

Benishangul Gumuz 1 0.00

Dire Dawa 6,046 3.60

Gambella 225 0.10

Hareri 1,188 0.70

Oromia 326 0.20

SNNP 1,108 0.70

Somali 1 0.00

Tigray 20 0.00

Total 167,062 100.00

Source: etworks jobseeker registration data

12
Table 6 presents the age categories of registered jobseekers. It can be seen that more than half of
the registered jobseekers are below the age of 30 years, implying that youths are the majority of
the jobseekers. However, the aged population, 51–66, is limited, constituting about 6% of the total
population. An important implication that one draws here is that the majority of the jobseekers
are the youth population begging for an important intervention either from the government or
other concerned bodies.

Table 6: Age categories of registered jobseekers

Age categories No. %

14-20 12,315 7.60

21-30 71,426 43.90

31-40 47,450 29.10

41-50 21,277 13.10

51-66 10,327 6.30

Total 162,795 100.00

Source: etworks jobseeker registration data

Another important demographic characteristic of jobseekers is to see whether a gender difference

is in registration. Figure 6 shows the male/female share of the registered jobseekers and indicates
that the share of female jobseekers is a bit higher than their male counterparts (54% vs. 46%).

Figure 6: Gender of the registered jobseekers

46% Male

Female

54%

Source: etworks jobseeker registration data

13
Table 7 presents the educational status of registered jobseekers. About one third of the total
registered jobseekers are in primary school. The next population of jobseekers are in lower
secondary school (grades 9–10) constituting about 25% of the total jobseekers. Whereas,
the share of university or TVET graduate jobseekers is only about 19%. This indicates the
majority of the jobseekers are not college graduates looking for professional
jobs ; rather primary or secondary dropouts who might look for medium skill jobs. This may
require further training and intervention from the government or the donor communities.

Table 7: Educational status of jobseekers

Educational classfication No. %

None 13,867 8.30

Informal education 6,445 3.90

Grade 1-8 54,227 32.50

Grade 9-10 41,911 25.10

Grade 11-12 18,237 10.90

TVET 15,818 9.50

Undergraduate degree 16,123 9.70

Post-graduate 431 0.30

Total 167,059 100.00

Source: etworks jobseeker registration data

Furthermore, jobseekers were also asked Another important issue is the disability status
whether one has a job or not, and Figure 7 of registered jobseekers. In this regard, the
presents the current employment status of the share of individuals with disabilities is pretty
jobseekers. About 97% of them mentioned that much low, constituting less than 1% of total
they were unemployed and the employed are registered jobseekers. More than 95% of them
only about 3% of the jobseekers but looking for reported to have no experience.
another job.

Figure 7: Employment status of the jobseekers

3% Employed

Employed Unemployed
97% Unemployed

Source: etworks jobseeker registration data

14
3.2 Profiles of Registered Graduates

From all regions, at the end of 2019, MoLS collected the profile of graduates who were
looking for a job. However, the response was not as steady and complete as one would
expect. Only some regions registered the list of graduates and compile it appropriately. In
this report, we present the profile of those registered graduates who were looking for a job.

As of Dec 2019, in all regions, more than 109 thousand graduates registered as jobseekers.
These graduates have different educational preparations and demographic characteristics.
Figure 8 depicts the gender-wise distribution of registered graduate jobseekers. It shows that
about 58% of graduated jobseekers are male, indicating that the share of female graduated
jobseekers is insignificant. The gender-wise distribution is to the ministry of education report
for 2018/19 prospective graduates.

Figure 8: Gender distribution of graduated jobseekers.

58%
Male Female

42%

Source: Own computation based on the graduation profile data

Figure 9 shows the educational qualifications of graduated jobseekers; showing most of the
graduates are TVET and undergraduate degree graduates with TVET graduates outweighing in
the number of graduates, while graduated jobseekers with masters and above are insignificant.

Figure 9: Educational qualifications of graduated jobseekers.

50,000 42,271 46,957

40,000
TVET AND CERTIFICATES

MASTERS AND ABOVE

Number of graduates

UNKNOWN
DIPLOMA

30,000
DEGREE

20,000
13,237

10,000

450 1,439
0
Qualifications

Source: Own computation based on the graduation profile data

15
The regional distribution of the registered graduates is also presented in Figure 10. It highlights
that the largest share of the registered graduates is from Amhara region which constituted about
46%. Next to Amhara region, SNNP, Addis Ababa and Oromia follows with a share of 22%, 13%
and 12% graduates respectively. However, this does not reflect the number of graduates from
each region rather the number of registered and reported graduates by the respective regions.
Figure 10: Regional distribution of graduated jobseekers

Amhara
SNNP
Addis Ababa
Oromia
Tigray
Gambella
Benishangul Gumuz
Hareri
Somali

Source: Own computation based on the graduation profile data

A n o t h e r i m p o r t a n t i s s u e t h a t n e e d s t o b e h i g h l i g h t e d i n t h e re p o r t i s , t h e f i e l d s o f
e d u c a t i o n t h a t t h e g r a d u a t e s a t t e n d e d . F i g u re 1 1 p o r t r a y s t h a t E n g i n e e r i n g a n d
Te c h n o l o g y h a s t h e h i g h e s t s h a r e o f g r a d u a t e s ( 2 7 % ) f o l l o w e d b y B u s i n e s s a n d
Economics (23%), Social science and linguistics (8%) and applied and computational
science (7% ). Besides, Automotive and drafting, agricultural and environmental
science, agriculture related, medicine and health, and electricity have some significant
s h a re s .
Figure 11: Field of studies of graduated jobseekers

30,000
Agriculture and environmental science
Applied and computational sciences

25,000
Social science and linguistics
Engineering and technology

20,000
Business and economics
Number of graduates

Metal and wood works

Medicine and health

Agriculture related
Auto and drafting

Business related
Manufacturing

15,000
Creative Arts
Construction
Electricity

Unknown
Tourism

Other
ICT

10,000

5,000

0
Field of studies

Source: Own computation based on the graduation profile data

16
3.3 Education Enrollments—Potential Future Labor Supply

Educational enrolments at different educational grades could give us the potential of the
supply side. It will also imply whether enrolments increase or decrease with grades and
geographic locations. Table 7 presents the educational enrolments at all education levels by
gender excluding Addis Ababa. As of 2019/20 (2012 EFY), enrollment of more than 27 million
pupils in school with a balanced share of female and male pupils where the male slightly
overwhelms females (53% versus 47%). Of the total enrollment, more than 73% of the total
enrollment is in primary kindergarten. Though the share of enrolments in primary school is
high, enrollment in secondary school is significantly lower. This could be attributed to lower
completion rates and higher dropout rates.

Table 8: Enrollments by levels of education and gender

Total
Education level Male Female
No. %

Adult education 1,807,921 1,539,700 3,347,621 12.12

Kindergarten 317,521 288,171 605,692 2.19

Primary 10,815,285 9,570,178 20,385,463 73.79

Secondary 1,790,472 1,495,649 3,286,121 11.90

No. 14,731,199 12,893,698 27,624,897 100.00

Overall
% 53.33 46.67 100.00

Source: Own computation based on MoE data

Table 9 presents primary school completion and dropout rates by region and gender. It can
be seen that the completion rate is higher for lower primary schools—about 88% of the
students enrolled complete Grade 5 (84% for females vs. 92% for males). But it declines
significantly for higher primary. The completion rate for Grade 8 is lower, which is about 58%
indicating that of the total students enrolled, only 58% of them complete Grade 8.

The lower completion rate could mean either grade repetitions or dropouts. Table 8 also
presents the dropout rates in primary school and depicts that about 14% of the students
drop out of primary education in 2012 EF Y. Thus, looking into the future labor market,
there seems to be a high potential of incoming labor force consisting mostly primary or
some secondary dropouts. This requires an active labor market policy that addresses the
employment problems associated with the type of labor force.

17
 Table 9: Primary completion and dropout rates by region

Completion rate G_5 Completion rate G_8 Primary dropout rate

Region
Male Female Total Male Female Total Male Female Total

Tigray 118.56 113.26 115.95 91.18 89.47 90.33 13 8 11

Afar 40.34 36.00 38.34 21.87 16.92 19.59 19 22 20

Amhara 113.86 112.33 113.10 72.78 77.81 75.28 13 9 11

Oromia 94.48 80.84 87.71 55.49 47.12 51.33 18 18 18

Somali 76.85 67.08 72.38 34.87 27.16 31.34 4 8 6

Benishangul 109.04 91.64 100.52 72.53 54.24 63.56 18 19 19

SNNP 92.27 81.15 86.74 67.12 57.46 62.30 13 13 13

Gambella 112.98 115.80 114.31 120.78 103.82 112.75 4 6 5

Harari 99.89 82.07 91.16 64.20 50.12 57.29 8 9 8

Addis Ababa 132.13 150.94 141.71 128.15 155.43 142.13 0 0 0

Dire Dawa 88.19 79.14 83.72 62.44 57.38 59.93 13 15 14

National 91.63 84.33 88.04 59.45 55.87 57.69 14 13 13.9

Source: Own computation based on MoE data

Figure 12 presents educational enrolments by region and gender, high enrollment is in Oromia,
following SNNP and Amhara regions. This could be attributed to the size of the population and
the number of schools in each region.
Figure 12: Enrollments by region

Male Female
6,000,000

5,000,000

4,000,000
Number of enrollments

3,000,000

2,000,000

1,000,000

0 Dire Dawa Gambella Hareri Oromia SNNP Somali Tigray

Afar Amhara Benishangul
Gumuz
Region

Source: Own computation based on MoE data

18
4. Public Sector Employment

In Ethiopia, employment in the public sector has

been significant. The data obtained for public
service employment is from the Civil Service
Commission (CSC). As of 2019/20 (2012 EFY),
employed in public service is 2,036,414, under
both the federal and regional governments at
different structures and with different occupations.
Figure 13 depicts the share of male and female
employees in public sector employment and
reveals that male took 61% of employment. This
indicates that gender disparity for males and
might require how this would be balanced.
Figure 13: Public sector employment by gender

60.79%
Male Female
39.21%

Source: Own computation based on CSC data

Figure 14 shows the total public sector employment and annual public sector employment
g ro w t h r a t e s f ro m 2 0 0 7 / 0 8 t o 2 0 1 9 / 2 0 . I t c a n b e o b s e r v e d f ro m t h e f i g u re t h a t p u b l i c
s e c t o r e m p l o y m e n t h a s b e e n i n c re a s i n g o v e r t i m e f ro m a b o u t s i x h u n d re d t h o u s a n d
i n 2 0 0 7 / 0 8 t o m o re t h a n t w o m i l l i o n i n 2 0 1 9 / 2 0 . T h o u g h t h i s i n d i c a t e s a p o s i t i v e
growth rate in public sector employment, the growth rate has shown a declining trend,
d e c re a s i n g f ro m a n a n n u a l g ro w t h r a t e o f 1 4 % i n 2 0 1 3 / 1 4 t o 7 % i n 2 0 1 9 / 2 0 .

Another important dimension is the level of education equipped by public sector employees.
Figure 16 depicts the educational profile of public sector employees. Degree graduates with
about 34% hold the highest share, followed by Diploma graduates and TVET graduates (levels
1 to 5) with about 29% and 20% share of the total respectively. About 88% of all public sector
employees have an above grade 12 levels of education. Thus, the level of education public
sector employees have seemed fairly good, but no information on the levels of skill they possess.

19
 Figure 14: Total number of employees and growth rate of employment

Employees Growth Rate (%)

2,500,000 30

25
2,000,000

20
Employees

Growth Rate (%)

1,500,000

15

1,000,000

10

500,000
5

0 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 0
Year

Source: Own computation based on MoE data

Figure 15: Number of public sector employees by levels of education

Male Female
500,000
Diploma/ College (10+3)
1st - 4th Year College

400,000
Certificate (10+1)
Number of employment

Read and write

Grade 9 - 12

M.A./ M.Sc.

Not Started
B.A. / B.Sc.
Grade 1 - 4

Grade 5 - 8

Diploma

300,000
Level 2

Level 3

Level 4

Level 5
Level 1

D.V.M.

L.L.M.

Ph.D.
L.L.B

M.D.

200,000

100,000

0
Level of education

Source: Own computation based on CSC data

20
Figure 16 presents public sector employees by their age groups. It depicts that more than half
of public sector employees are below the age of 33, indicating that the young-aged employees
filled the public sector .

Figure 16: Public sector employees by age group

>60

58 - 60 1.46

53 - 57 2.59

48 - 52 4.63

7.03
43 - 47

10.70
38 - 42
Age group

33 - 37 16.52

26.44
28 - 32

22.10
23 - 27

18 - 22 8.07

0 5 10 15 20 25 30

Percentage share

Source: Own computation based on MoE data

21
 5. Private Sector Employment

The private sector is the largest employer in

the country . But it is difficult to account for the
number of employees since, the informal sector
and even the formal sector may not report about
their employees to the relevant government agency.
Data for the private sector employment indicators
is from the Private Organizations Employee Social
Security Agency (POESSA).

POESSA is a self-governing federal government agency established by the Council of Ministers

under Regulation No. 202/2011 to strengthen and expand the social security program for
private organization’s employees. The registration data is gathered from employers and
employees’ registration, which is reported just once during registration and the pension
contribution data is a monthly data obtained from monthly pension contributions payments.

Figure 17 depicts the number of workers in the industry they work at. The trade sector appears
to employ the most people, followed by industry and other sectors. This is because the
service sector has a larger establishment, most of which employ fewer people per capita. As
a result, the trade sector appears dominant in terms of the total number of jobs produced.

Figure 17: Total number of employment by sectors

12,000,000

10,000,000

8,000,000
Number of employment

Not Identified
Construction

6,000,000
Association
Agriculture
Industry

Others

Total

4,000,000
Aid

2,000,000

Sectors

Source: Own computation based on POESSA data

22
The distribution of employment is also highlighted in the POESSA data. Figure 18 presents the
regional distribution of total employment in the last 10 years. It can be seen that most of the
private sector employment is concentrated in Addis Ababa.
Figure 18: Total number of employment by region

12,000,000

Addis Ababa
Benishangul
10,000,000

Dire Dawa
Gambella
Amhara

Oromia
Employment

Somali

SNNP

Hareri

Total
8,000,000
Afar

6,000,000

4,000,000

2,000,000

0
Region

Source: Own computation based on POESSA data

Figure 19 presents the total number of employment by sector and year. The figure highlights that
the trade sector remains to have the highest total number of employees over the years followed
by the industry and the other sectors (not mentioned here). The association and aid sectors, on
the other hand, have the smallest workforce.

Figure 19: Sectoral distribution of total employment by year

Trade Industry Construction Association

800,000
Others Aid Agriculture Not Idetified

700,000

600,000

500,000
Establishments

400,000

300,000

200,000

100,000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year

Source: Own computation based on POESSA data

23
Figure 20 shows the year-by-year distribution of establishments by sector, revealing that the trade
sector regularly has the most total establishments. Agriculture and associations have the lowest
number of establishments..
Figure 20: Sectoral distribution of total establishments by year

Trade Industry Construction Association

20,000 Others Aid Agriculture Not Idetified

15,000
Establishments

10,000

5,000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Trade Year
Industry Construction A
Source: Own computation based on POESSA data

Others Aid Agriculture N

However, examining the job creation potential of sectors regards suboptimal based on the
number of firms and employees . As shown in Figures 19 and 20, the trade sector has the
highest number of employees and businesses. The average number of employees per firm or
institution is depicted in Figure 21. Accordingly, the industry sector has the highest number of
employees per firm, followed by the agriculture sector, while the trade sector has the lowest
number of employees per firm..

Figure 21: Average number of jobs per firm by sector

Trade Industry Construction Association

Others Aid Agriculture Not Idetified

250

200

150
Percentage

100

50

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year

Source: Own computation based on POESSA data

24
The average salary of private-sector workers should be explored. Figure 22 shows the average
salary of employees by sector, revealing that the aid sector pays the most, with an average
monthly wage of roughly ETB 7,359, more than double the national average (ETB 2,878). The
construction industry follows with an average monthly wage of around ETB 3,009. The agriculture
sector, on the other hand, pays the least, with a monthly income of around ETB 1,672.

Figure 22: Average salary of private sector employees by sector

8,000

7,359.00

7,000

6,000

5,000
Average salery

4,000

3,009.30
2,878.60
3,000
2,745.3 2,634.00
2,488.40

2,135.10

2,000
1,672.10

1,000

0
Trade Industry Agriculture Construction Aid Association Others Overall
average
Sector

Source: Own computation based on POESSA data

25
6. Impact of COVID-19
COVID-19, an infectious disease, caused by a newly discovered virus and is transmitted through
droplets coming out when an infected person coughs, sneezes or exhales. Following the spread
of the virus, countries have closed their doors, business has slowed and people confined to
their homes. After cases were discovered in Ethiopia, the government declared a state
o f e m e rg e n c y a n d i m p l e m e n t e d s t e p s t o re d u c e t h e i m p a c t o n b u s i n e s s e s , s u c h a s
t a x c u t s a n d t a x e x e m p t i o n s . I t w o u l d be helpful to explore the impact of COVID-19 on
businesses and employees.

In the previous LMI report, the impact of COVID-19 on businesses was assessed using the
first wave of the World Bank’s high-frequency phone survey of firms (HFPS-F ). The viral
outbreak affected more than 93 percent of the sampled firm s. The MoLS surveyed 839
enterprises from six regions, including Amhara, Oromia, SNNP, Sidama, Addis Ababa, and
Dire Dawa, in this repor t. The survey covers firms of all sizes and industries, including
agriculture, industry, and services, and micro, small, medium, and large businesse s. The
general features of enterprises in terms of regional distribution, sectoral mix, and gender
of owners or managers is depicted in Figure 2 3.

The survey covers 6 regions with Addis Ababa and Amhara having about 30% share each followed
by Oromia, covering about 20% of the firms. In terms of gender, males owned more than 70% of
firms or managed by them. When we see the sectoral composition of the firms, more than half
of the firms in the survey are from the service sector while about one third of them are in the
industry sector.

Figure 23: Regional, sectoral and gender distribution of firms

80
Addis Ababa

Agriculture
Dire Dewa

71.53
SNNPRS

Medium
Industry
Amhara

70
Oromia

Sidama

Female

Service

Micro

Large
Small
Male

60
51.51

50
43.7
Percentage

40 36.4 36.32

29.95 29.59
28.47
30
19.81
20 15.01
12.09

10 6.44 7.04 7.16

4.96

Source: Own computation based on MoLS data

26
Moreover, the distribution of firms revealed that micro and small enterprises cover about
44% and 36% of the total firms respectively, while large enterprises cover only 5% of
the firms. In the survey, firms were asked if COVID-19 hampered their operations since
the onset of COVID-1 9. As can be seen from Figure 24, about 92% of the surveyed firms
reported that they have faced a decline in their operations in the period between March
2020 to March 202 1. The early findings of the World Bank’s HFPS-F where the outbreak
of COVID-19 affected 93% of the firm s. Dismembered by different characteristics, the
percentage of firms reported a decline in operatio n. Figure 25 portrays that the decline
in operation was higher for firms from SNNPR and Sidama regions, female-owned
enterprises, the service sector, and large and micro-enterprise s.

Figure 24: Did the firm face any operation decline in the last 1 year (March 2020 to March 2021)?

SNNPRS 98.08
Sidama 98.18
Dire Dewa 96.15
Oromia 86.18
Amhara 89.22
Addis Ababa 93.7

Male 90.57
Female 94.5

Agriculture 90.62
Industry 91.58
Service 92.58

Micro 93.49
Small 88.81
Medium 91.53
Large 94.59

0 20 40 60 80 100

Percentage

8%

Yes No

92%

Source: Own computation based on MoLS data

27
COVID-19 has influenced not just on businesses, but also on the people who work for them.
Figure 25 shows the percentage of employers that laid of their employees in the previous year.
Approximately 39% of businesses have laid off employees in the previous year. The percentage of
businesses reporting that they have laid off employees varies by industry. The highest percentage
is reported in SNNPR and Sidama regions, for male-owned enterprises, for the industry sector,
and for large firms.

Figure 25: Percentage of firms that laid of their workers in the last one year

Addis Ababa 44.3

Amhara 31.82

Oromia 37.58

Dire Dewa 32.08 52.73

Sidama 45.76

SNNPRS

Male 40.03

Female 36.24

Agriculture 36

Industry 49.32

Service 33.17

Micro 34.67

Small 44.67

Medium 36.89

Large 46.15

Overall 39.09

0 10 20 30 40 50 60

Percentage

Source: Own computation based on MoLS data

28
In the survey, to better understand the impacts of COVID-19, firms were asked about the measures
taken to mitigate the effects on their operations. Figure 26 show the actions taken by businesses to
limit the impact of the pandemic on their operations. About 45 percent of the companies’ strategies
were widening and price increases for mitigating the pandemic’s impact on their business. The next
steps taken by businesses to alleviate the effects of the pandemic are obtaining loans and lowering
costs (reflected by staff layoffs), reported by 30% of businesses. About 13% of the firms said they
took no precautions against the pandemic’s effects.

Figure 26: Measures taken by firms to mitigate the impacts of COVID-19

1 Ceasing Operation
1 Getting government support

4 Putting in place COVID 19 prevention measures and keeping

5 Getting support from family and the social network

13 No measure taken

15 Getting credit
15 Cost reduction (including stuff layout)

Business diversification and price increase 45

0 10 20 30 40 50

Percentage

Source: Own calculation based on MoLS data

29
7. Conclusion

The Ethiopian government has given due attention to creating jobs, particularly for
the youth, who make up the majority of the population. Recognizing the country’s
growing unemployment problem and the need to coordinate on-the-job creation
agendas, various institutions merged to form the Ministry of Labor and Skills (MoLS).

The main purpose of the MoLS is to: Lead and drive Ethiopia’s job creation agenda in
Ethiopia; coordinate and support job creation efforts of federal and regional public
institutions, private sector actors, and development partners; ensure the adoption
and implementation of pro-employment policies across sectors; develop a robust
LMIS that fosters jobseekers, employers, and policymakers; mobilize resources and
innovative investments that support start-ups, enterprises, and job creation program;
promote and support innovations, entrepreneurship programs and engagement of
the private sector for job creation and enable the training and education sector to
produce qualified graduates with skills and ethics that fit into the labor market.

The ministry has announced the commencement of an ambitious action plan

aimed at closing the 20 million jobs gap by 2030. The ministry’s main task has
been to regenerate the growth of LMIS, which has necessitated the cooperation
of many governments and private stakeholders. The dissemination of labor market
knowledge on a regular basis based on accessible data to enable cogitation is
one of the fundamental duties of the LMIS. Accordingly, the first LMI report, which
includes the whole set of data from both the demand and supply sides, was prepared
in 2019. LMI attempts to provide some insightful datasets from both the supply and
demand sides of the labor market in the current report. From the demand side of
the market, there were over 38 thousand jobs advertised online, with nearly half of
them requiring two or more years of expertise in business and finance. The second
one is about the types and characteristics of business establishments since 2011.

The majority of the businesses, over 65 percent, are involved in commerce,

and more than 70 percent are microenterprises, according to the MoTI data
analysi s. This means that the bulk of the 2.6 million business establishments
are engaged in trade and are micro-sized businesses, implying that their labor
absorption is lower and their influence in job creation is minor. From the supply
side, etworks, jobseeker registration, and educational enrollment are discussed.
More than 160,000 jobseekers have registered between November 2019 and
May 2021, according to the registration dat a. Addis Ababa is home to more
than 93 percent of the m.

30
The profiles of the registered jobseekers indicate that most of them are youths
who are primary and secondary school dropouts; only about 19% of them reported
having university and TVET graduate s. In terms of gender, female jobseekers
seem to outnumber male jobseekers. Divorced jobseekers registered, more than
40%. According to MoE data, more than 14 million pupils enrolled in grades 1–12,
including adult education in 2012 EFY, about 70% were in primary educatio n.

It is also highlighted that the completion rate for lower primary is about 88% while it
is about 58% for higher primary and that the primary school dropout rate was 14%.
Furthermore, the employment situation in both public and private sectors are also
explored. According to the 2012EFY CSC data, more than 2 million civil servants of
which about 60% of them are male and about 88% have either completed Grade 12
or have a higher level of education. While the trade sector dominates private-sector
employment, the POESSA data highlights that the average number of employees per
firm in the trade sector is among the lowest. Furthermore, the report also highlighted
the impact of COVID-19 on firms using data collected by the MoLS.

About 92 percent of the companies said their operations were impacted, and
about 39 percent of the companies said they had to lay off people. To alleviate
the effects of the pandemic, about 85 percent of the firms said they took various
efforts to reduce the pandemic’s impact on their operations. This expressive LMI
report describes both sides of the labor market. The trade sector dominates the
establishments, according to the demand side of the labor market. Though the
number of establishments is increasing with time, the increase in employment
may not be as significant as one might think.

Furthermore, while online openings show that business and finance are the most
popular, the government’s concentration is on engineering and technolog y.
This necessitates the government’s efforts to either promote engineering and
technology jobs or other disciplines that the market requires. However, substantial
research was implemented to investigate and comprehend the difference between
the demand for and supply of labor or skills plus what one can do to address the
labor market mismatch.

31
8. References
Gammarano, R. (2019). Labor market access: a persistent challenge for youth around the world.
ILO Department of Statistics’ Data Production and Analysis Unit.

Mezzanzanica, M. & Mercorio, F. (2019). Big data for labor market intelligence: An introductory
guide. Eur. Training Found. Torino, Italy, Tech. Rep.

Sorensen, K. & Mas, J. M. (2016). A Roadmap for the Development of Labor Market Information
Systems.

32
2022