Discussion Paper No. 118 of 2010 on The Role of Education and Training in Reducing Poverty and Unemployment in Kenya

Abstract

Unemployment and poverty are major socio-economic challenges affecting most countries. They are associated with under-utilization of resources, while leading to low welfare status. In the past, the Kenya government has implemented various interventions aimed at reducing illiteracy, lowering unemployment and alleviating poverty, including expansion of education and training. Despite these efforts, unemployment and poverty continue to afflict a large segment of the Kenyan population. In 2005/6, for instance, Kenya’s poverty and unemployment rates were estimated at 45.9 per cent and 12.7 per cent, respectively. This study analyses the effects of education and technical training on unemployment and poverty, using the most recent crosssectional data (KIHBS, 2005/6) for Kenya. The study establishes that university education and technical training play critical roles in reducing the risk of being poor, and either being openly unemployed or under-employed through their effects in increasing individual earnings. Consequently, while increasing access to basic education is critical in laying the foundation for entry into higher education, improving access to post-primary education, especially secondary, technical training and university education is critical. There is need to improve investment and growth for effective creation of high quality jobs in both the formal and informal sectors to enable increased absorption of skilled and educated labour force and productivity.