Discussion Paper No. 279 of 2021 on The Effect of Science, Technology, Engineering and Mathematics Skills on Youth Employment in Kenya

Abstract

The choice of the employment sector is influenced by several individuals’ characteristics, among them the Science, Technology, Engineering and Mathematics (STEM) skills. In this study, the paper seeks to determine the effects of STEM skills on youth employment in the private sector, public sector and self-employment. The paper further seeks to examine the effect of STEM skills on the type of employment contract among Kenyan youths categorized as permanent, temporary and fixed-term contracts. The study used secondary data from the World Bank Skills Towards Employability and Productivity (STEP) household wave-3 survey. The survey involved a stratified three stage sample design in collecting information on 3,894 households. Multinomial logit was used to analyze the effects of STEM skills on youth employment and the type of employment contract. The key findings of the study reveal that youth with STEM skills are more likely to be in self-employment and in temporary contracts. Overall, the public sector is less likely to employ youths with STEM skills and, therefore, STEM opportunities are mainly in the private sector and self-employment. Other factors such as experience, level of education by STEM skills, and job search duration were found to be significant in determining employment of youth and the type of employment contract. Youths with STEM skills were more likely to be employed in the private and self-employment sectors. Given that the public sector is the least of the employers for youths with STEM skills, the study recommends creating an enabling environment and conducive environment for the private sector and self-employment to absorb more youths in STEM. Secondly, there is potential in self-employment of STEM skills graduates. There is need, therefore, to incentivize youths with STEM skills and in self-employment to attract more, expand and become employers. Lastly, experience increases the chances of getting employed and, as such, there is need to invest more in internships, apprenticeships, and trainee management to equip the youths with on-job training after formal education.