Urban Youth Savings Mobilization: A Case Study of Nairobi City County, Kenya
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Date
2024-08
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Kenyatta University
Abstract
Savings play a vital role as they act as backstop for capital formation and economic growth. A better saving behavior is the basis of a sound economic and financial policy. Studies on savings have historically taken a central position in several economic research areas. Issues and problems related to savings among households and individuals have gained significant importance in microeconomic studies as savings stimulate larger investments and higher gross domestic product growth. Studies conducted in developing countries have shown that savings remain low particularly among the youth due to various factors such as high unemployment rates, low incomes,limited access to financial services and high dependency rates among other factors. Low saving culture inhibits the availability of investment funds. Low savings among the youth in Kenya stems from almost similar factors which have hindered substantial increase in domestic savings for economic growth. This research study therefore sought to examine the effect of income and employment on the urban youth savings using Ordinary Least Squares estimation method. The goal was to get an understanding on the effect of income and employment factors on the uptake of savings by the urban youth in Nairobi City County. A cross-sectional research design was adopted where primary data was collected from the youth in Nairobi City County. Random samping technique was used to select the respondents in the survey where self-administered questionnaires were used to collect data from 400 urban youth. The study’s results demonstrated a positive relationship between employment and income on the urban youth level of savings in Nairobi City County. Other factors such as rate of return was found to positively affect savings while factors such as age, number of dependants and education affected savings negatively.The study concluded that creating more employment opportunities for the youth, promoting their incomes through quality jobs and through revitalizing both the formal and informal sectors and offering higher rate of returns on savings would be critical in mobilization of savings.
Description
A Research Study Submitted to the Department of Economic Theory in the School of Business, Economics & Tourism in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Economics (Policy & Management) of Kenyatta University, August 2024.