Analysis of determinants of youth self-employment career choices

Abstract

Purpose

Given the different manifestations of the unemployment crisis, the main purpose of this study was to identify what characteristics influence the participation of youth in key self-employment business options.

Design/methodology/approach

The study has used both probability and nonprobability sampling techniques. Purposive sampling methods were used to identify target study areas (districts and Kebeles) while the systematic random sampling method was used to locate sample respondents. A total of 424 sample respondents were interviewed through interview scheduled questionnaires. Statistical data analysis was carried out using STATA 14 software.

Findings

Agriculture, local value-added business activities, food-related services, petty trade and local transportation were common business choices where unemployed youths were engaged in. The findings of the study also showed that sex, loan size, loan repayment period and training gap were predictors of youth engagement in various self-employment career choices.

Practical implications

Increasing loan size has a positive and significant influence on youth engagement in all self-employment business choices and has reminded us the need to revise or lift up loan size celling to assist youths in engaging in productive sectors. Similarly, the favourable correlation between female youths and value-added activities necessitates a well-designed female-specific intervention.

Originality/value

An understanding of the key determinants of youth preference to engage in specific self-employment career choices enables practitioners to intervene where necessary in supporting youth self-employment engagement. A combination of skill training, relaxed loan size and relaxed repayment is likely to gain sustainable business, which would benefit the local economy by transforming small businesses to a higher level and creating more job opportunities.

Citation

Melak, D. and Derbe, T. (2022), "Analysis of determinants of youth self-employment career choices", Journal of Small Business and Enterprise Development, Vol. 29 No. 6, pp. 886-901. https://doi.org/10.1108/JSBED-10-2021-0435