Effects of International Trade on Youth Unemployment in Kenya
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Date
2023
Authors
Mwangi, Stanley Njuguna
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The majority of Kenya's trade depict deficits with trade balances being in favour of her trading
partners. The country's exports are subject to both fluctuating global pricing, which results
in negative trade balances. The gains of international and bilateral trade are immense to Kenya
since its independence particularly with the western allies. To facilitate trading activities in
Kenya, the integration of Kenya into blocs like East African Community, the Common Market
for Eastern and Southern Africa and African Continental Free Trade Area have contributed
significantly to the growth and development of the economy. These blocs significantly
contribute to Kenya’s trade volumes. The core of Kenya's export sector is the agricultural sector.
Almost a quarter of the country's productivity comes from agriculture and related industries
where Kenya's two main exports are horticulture goods and tea. However, the country has
persisted in posting high unemployment levels, particularly among the youth. The latest census
data demonstrated that more than a third of Kenyan youth are unemployed while World Bank
data indicates, in comparative terms, that Kenya youth joblessness is the highest in East African
States. In fact, Kenya is one of the nations in the region with the biggest discrepancies between
youth and adults in terms of employment rates. This study empirically analysed how Kenya's
liberalization of international trade affects youth unemployment for the last three decades. The
specific objectives of the study were to analyse the effect of imports and exports on youth
unemployment in Kenya. Non-experimental research design was used and conclusions and
recommendations were presented based on the study outcomes. The findings showed that exports
had a negative and substantial effect on youth unemployment, while imports had a negative and
insignificant effect on Kenya's youth unemployment. The findings further indicted that youth
unemployment depicts a positive relationship with the level of gross domestic product (GDP) as
well as the level of trade liberalization or openness to international trade and are all statistically
significant. In order to reduce youth unemployment, policymakers should tap into the local talent
through improvement of skilled labour among the youth through targeted trainings and focusing
on technological transfer as opposed to outsourcing or opening up the job market to the outside
world.
Description
A Research Project Submitted to the Department of Applied Economics in Partial Fulfilment of the Requirements for the Award of Master of Economics and Finance Degree of Kenyatta University,November 2023.
Keywords
Effects of International Trade, Youth Unemployment, Kenya