About 1 million youth enter labour market yearly, over 80% find informal jobs - Report

A new study has revealed that nearly 1 million young Kenyans enter the labour market every year, but more than 80 per cent of those who secure employment end up in informal jobs without written contracts, health insurance, social security contributions or income security.

The Political Economy Analysis of Youth Employment in Kenya report, released by the African Institute for Development Policy (AFIDEP) in partnership with CAP-YEI (Youth Empowerment Institute), paints a grim picture of the country's youth employment landscape despite years of policy interventions and investments aimed at creating jobs.

The study notes that youth unemployment remains above 35 per cent, but argues that the greater challenge lies in the quality of jobs available to young people.

“More than four in five employed young people work in informal conditions—without a written contract, without social health insurance cover, without national social security contributions, and without income security if they fall sick, are injured, become pregnant, or are simply not paid,” the report states.

Researchers further found that while youth labour-force participation rose by 17 percentage points between 2016 and 2021, employment rates fell by nine percentage points during the same period, while wage employment declined by 13 percentage points.

The report attributes the persistent challenge to weak implementation of existing policies, inadequate investment, poor coordination among institutions and political interference.

“Kenya’s youth employment challenge is not a lack of ideas or policy frameworks, but lack of evidence-informed policy formulation and programming and tracking. We must align public investment, private sector incentives, and skills development to ensure that economic growth translates into real jobs for young people,” said AFIDEP Research and Policy Analyst Dr Joshua Magero.

The study identifies agriculture, agri-processing, leather, blue economy, manufacturing, construction, logistics and digital services as sectors with the greatest potential to absorb young workers if supported through targeted investments and policy reforms.

Researchers also raised concern over the shrinking share of formal employment among young people.

The report shows that formal wage employment fell from 54 per cent to 41 per cent of the youth labour force between 2016 and 2021, while informal and own-account work increasingly became the dominant source of employment.

AFIDEP Board Chairperson Elizabeth Lule said Kenya already has a strong policy foundation but requires stronger implementation and accountability.

“The evidence we are presenting today demonstrates that solutions already exist within Kenya's policy architecture. What is needed is stronger coordination, more deliberate investments, better alignment between skills and labour market demand, greater support for productive sectors, stronger protection for informal and gig economy workers, and greater accountability for results,” she said.

The study also highlights the growing role of the gig economy, with a survey of 857 workers across all 47 counties finding that 50.3 per cent rely on gig work as their primary source of income.

However, researchers warn that many gig workers remain outside social protection systems and labour regulations.

To address the challenges, the report recommends the establishment of a high-level national coordination mechanism bringing together government, the private sector, development partners and youth representatives to drive a unified employment agenda.

It also calls for a demand-led skills-to-work system, expansion of apprenticeships and internships, targeted support for youth enterprises, and stronger protections for workers in the informal and digital economy.

“Young people are not asking for charity. They are asking for systems that work. When skills training, financing, and enterprise support are connected to real market opportunities, youth-led businesses can thrive, create jobs at scale and policies work best when they are informed by evidence and shaped by the voices of those they are meant to serve,” said CAP-YEI Director of Programmes Dennis Muchiri.