<u>Table 4: Labor Market Status of the Working Age Population (10+)</u>

||<br>1<br>(|<br>995/96<br>HICES)|<br>||<br>1999<br>(LFS)|||2005<br>(LFS)||2<br>(|010/1<br>HICES)|1<br>|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Tot.|Urb.|Rur.|Tot.|Urb.|Rur.|Tot.|Urb.|Rur.|Tot.|Urb.|Rur.|
|Working Age Population, mln|35.7|5.7|30.0|36.0|5.6|30.4|41.0|6.9|34.2|51.5|9.8|41.6|
|Economically Active (LF), %|_63.8_|_49.4_|_66.5_|71.1|55.4|74.0|78.4|57.7|82.6|_67.2_|_55.0_|_70.1_|
|Employed, %|_62.3_|_41.6_|_66.3_|69.7|47.7|73.7|76.6|50.2|82.0|66.5|51.9|69.9|
|Unemployed, %|_2.3_|_15.9_|_0.4_|2.0|13.8|0.3|5.1|22.6|2.7|_1.0_|_5.7_|_0.2_|
|Economically Inactive, %|_36.2_|_50.6_|_33.5_|28.9|44.6|26.0|21.0|40.6|17.0|_32.8_|_45.0_|_29.9_|
|_of which: students_, %|_8.8_|_28.5_|_5.1_|10.5|26.3|7.6|9.7|26.0|6.4|_17.9_|_28.2_|_15.4_|
|World Development Indicators|||||||||||||
|LF Participation Rate (%, 15+)|81.0|..|..|81.0|..|..|84.6|..|..|84.0|..|..|
|_Ratio of female to male (%)_|78.5|..|..|78.7|..|..|86.1|..|..|87.3|..|..|
|Employment-to-Pop. Ratio (15+)|74.4|..|..|74.4|..|..|80.1|..|..|79.2|..|..|
|Unemployment Rate(%)|..|..|..|8.2|..|..|5.4|..|..|..|..|..|

Sources: Compiled from survey reports (HICES 1995/96, LFS 1999, LFS 2005, and HICES 2010/11) and WDI. Values in italic were directly calculated from survey data and should be treated with great caution.

Unemployment statistics are usually quite controversial, since they are dependent on the specific definition utilized. The official unemployment rate increased from 3.1 percent in 1994 to 8.2 percent in 1999, but has since then declined to 5.4 percent in 2005 and 3.7 percent in 2007 (MoLSA, 2011). Unemployment is typically associated with the (literate) youth in urban areas. Denu et al. (2005) argue that open unemployment is a middle-class phenomenon, with people queuing for government jobs.

# <u>Box 1: Population and Labor Force Growth</u>

Population growth has recently decelerated – from an average of about 3 percent per year in the 1990s to nearly 2.5 percent in the 2000s – although it remains relatively high. The average for SubSaharan Africa was also 2.5 percent per annum. Nonetheless, the labor force is growing at an even faster pace (at about 3.5 percent), which is considerably high even for regional standards. This is partly a consequence of Ethiopia’s demographic profile. Employment growth increased in the early 2000s – to above 4 percent per year – although it has fallen substantially in recent years.

Sources: Census (1994 and 2007) and WDI (2013) Table 5 provides data on the sectoral distribution of employment. Employment in agriculture has increased significantly, from 18 million in 1996 to nearly 27 million in 2011. This ensured that the share of agricultural employment in total employment remained very high – declining by only 3 percentage points from 81 percent in 1996 to 78 percent 2011 (see also Figure 6). Trade and other services accounted for 3.0 and 2.7 million jobs in 2011, respectively, nearly doubling their 1996 values. Jointly, these two sectors currently account for almost 17 percent of total employment. Manufacturing and construction have also experienced a noticeable expansion, albeit from a lower base. Total employment increased by 11.6 million between 1996 and 2011, with agriculture absorbing 72 percent of this increase, followed by trade (12 percent), other services (10 percent), manufacturing (4 percent) and construction (3 percent).

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