Social and Macroeconomic Determinants of Youth Self-Employment in Sub-Saharan Africa

ABSTRACT: Youths in sub-Saharan African (SSA) countries have found it increasingly difficult to transit into decent employment due to binding constraints in the labour markets. This study examines the leading factors that drive the youth entry into self-employment in SSA, as well as determinants of success of the youths in self-employment in relation to becoming an entrepreneur or employer in the region. Data from the School-to-Work Transition Survey (SWTS) for 7 SSA countries is used and the determinants of youth self-employment are estimated using the logit technique. It is found that factors that while social factors are more relevant in explaining youth entry into self-employment, macroeconomic and infrastructural factors play significant role in explaining the success of youths in self-employment. Skills, rather than general education, is also shown to be relevant in enhancing the success of youths in self-employment. This implies that the success of youths in self-employment requires more sectoral or policy interventions than general entry into the employment segment. Strategies to enhance the condition of youths in self-employment (promoting youth entrepreneurs) therefore require attention to the basics in terms of macroeconomic stability and promoting adequate financial and physical infrastructure.