Solving the unemployment problem in rwanda
Rwanda is one of the smallest low income African countries and a post- conflict country that shares boundaries with Uganda in north, Democratic Republic of Congo (DRC) in west, Burundi in south and Tanzania in east, Having emerged from the 1994 genocide and civil conflict and wars which claimed over one million people dead and left the socio-economic infrastructure completely smashed. The country suffered from harsh deficits which includes skilled human capital and this is largely for technical professions (RoR: 2008).
According to the 2002 census of Population and Housing, Rwanda`s Population was estimated at 10,4 million and with the population density of 321 persons per square kilometre. The country`s Population grew rapidly from a small size Population of 2 million in 1962 to over 10 million in 2010. The country has a relatively high rate population growth of 2.9% which could carry on the population to sixteen million in the year 2020, if this pace or speed is maintained. The population is predominately young with an average age of about 20 years of old with about 60% of the total population less than 19 years old with significant implications for young people `s unemployment (RoR:2002).
The young people in Rwanda represents hope for the future as a resource that holds a big reserve of human energy, and they can play a big role particularly in developing the economy.
Rwanda being one of the poorest countries in the world and much of her population is largely dependent on subsistence farming or agriculture in general. The formal industrial and employment is slightly developed and nearly non-existent outside the few larger urban areas basically Kigali main capital city, followed by smaller cities such as Huye, Cyangugu, Ruhengeri, Gisenyi, Gitarama, Kibuye and Rwamagana.
Over the past decades ,the youth in Rwanda have depended so much on employment generated by the Public Sector as the sole employer mainly due to ineffective policy framework that would facilitate the processes of generating employment ( RoR: 2005 ). Lack of active government input and facilitation has been one of the top most challenging factors among others. In the process of improving the lives and the standards of the population in Rwanda, the country has embarked on supporting and facilitating the informal sector as a means to generate more employment opportunities to vulnerable people especially the youth and has implemented policies to meet the Millennium Development Goals (MDGs) and other Rural Development Programmes like Vision “Umurenge”, Economic Development and Poverty Reduction Strategy (EDPRS) and the Vision 2020 as a framework to achieve the overall development in Rwanda ( RoR: 1999).
Rwanda is trying to change from an aid dependent country into a middle income country by developing its human capital with skills in different capacities to enhance employment creation for the entire population which is dominated by the youth. The Government of Rwanda established five year action plan for youth employment promotion and the strategies which is meant to help in developing her human capital by empowering the young people in the labour market so as to get decent jobs (RoR:2008).
It is in this regard that, the government has developed a number of vocational training institutions in all five Provinces (that makes up Rwanda) purposely to help the young people to gain certain level of skills to enable them become self-employed and make use of their effort in development. Nicola, (2005), argues that vocational education normally is projected to make young people become self reliant. This supports the argument that vocational education for young people is to become creative with necessary skills that enables them to start their own undertakings.
However, many studies in developing countries show numerous constraints in vocational training institutions, a situation whereby vocational training graduates hardly succeed when trying to seek economic activities or create employment, (Haan,2006).Yet the main goal of vocational training institutions is to prepare young people to fit in the labour market.
Based on the above views, this will necessitate the researcher to draw attention to the perceptions of the trainees from vocational institutions. The case of Rwanda`s vocational education system which lacks a sound and stable standard setting in place, this has created problems of low quality education that is somewhat not relevant to the current labour market which is competitive and tight as a result of large labour force supply in the country.
1.2 Statement of the problem
It is claimed that, young people always consider gaining skills as sole source of solving the unemployment problem for them and it is regarded as a form of transition for them to join the independent life style. Sen.(1997), argues that skills and knowledge can enhance human capability, a situation whereby young people can be able to make their own choices to lead lives they have reason to value. A recent initiative of the government of Rwanda to address the rampant unemployment trend in the labour market among the young people is the setting up of Workforce Development Authority (WDA). This institution was set up to improve the standards of vocational institutions in a country and play a regulatory role and working under the Ministry of Education and Ministry of Public Service and Labour but still a lot is missing due to; limited qualified personnel in training programmes, lack of experience for young people seeking employment, Inadequate skills to prepare the young people with enough capability upon the labour market standards , poor education system (RoR: 2010).
The high rate of unemployment in Rwanda is a result of poor education system which prepares young people basically for white collar jobs which have been declining across time.( RoR: 2002). The country`s formal unemployment rate is 15.5% and this impacts on nearly 696,260 persons (RoR:2005). The government of Rwanda has embarked on increasing expenditure on education sector and this has led to increased labour force supply from vocational training institutions. This has also led to increased demand for jobs within a tight labour market of Rwanda that is actually dependent on public jobs. This has led to a large crowd of unemployed young people based on the fact that the labour force supply exceeded the labour demands in the labour market and as a result of poor education system ,there is often smaller number of young graduates who are able to create their own employment.
In Rwanda, the private sector is mainly underdeveloped and this is also one of the major cause of a large crowd of unemployed young people in a country. In this case, the public sector remains the principal employer compared to the formal private sector (segment) yet public sector employs a small fraction of the employable inhabitants (RoR: 2007). The agricultural sector is the largest employer among the sectors in the country, but this sector is largely less productive and this is due to smaller range (size) of land share as per-person in the country, the land is often very small with less than 1 (one) hectare per-person/ inhabitant. This contributes to low output and low incomes to the rural dwellers, who are the majority of whom the young people and women, such people would be employed in other sectors ( RoR: 2002). The economically active and dynamic population that is active is estimated at 4,493,000 and among those 45% are men and 55% are women counter- parts. out of the above population, 2,334,000 are in the age bracket of young people in the country ranging from 15-29 years of age, where as 1,153,000 are under 20 years of age (RoR:2004).
Besides that, because of poor education and curriculum systems, the skills and competencies acquired by the young people from the vocational training institutions do not match with the requirements of labour market mainly because VET graduates often lack some confidence to stand on their own capabilities to start self-employment. The issue of self-employment has been worsened by the general lack of active labour market policies in place to facilitate the creation of employment for young people and active youth employment promotion policies in place which can also influence the decisions to avail credits and information pertaining job opportunities for unemployed young people from vocational training who may be troubled by the lack of initial capital to start the entrepreneurship businesses (RoR: 2008).
As it was suggested and adopted by UNESCO (1974) in a vital recommendation that, “technical and vocational education is an essential component of general education and as a system of preparing for occupational-workers and as a mechanism to shrink the mismatches involving trainings and employment”. Many young people are said to be trapped-up and hardly make it to start self-employment in the labour market. Thus, this study seeks to assess the effectiveness of vocational training institutions in building human capital as well as their capabilities in terms of giving the necessary skills and competencies required by young people to be self-employed in the labour market and the necessary strategies to alleviate the above constraints faced by the young people in the labour market.
1.3 Research objective and research questions
1.3.1 Main objective of the research
The objective of this research paper is to assess the labour market situation for the young people in Rwanda with reference of Gasabo District in Kigali-City. Emphasis is given to young people who graduate from vocational education and training going into self-employment. It tries to discover the mismatch between skills young people have and the desired competencies for self-employment in the current labour market.
1.3.2 Specific objectives of the research
To identify the journeys into self-employment taken by young people from vocational education and training in Rwanda,
To find out the perceptions of young people over the challenges they face during the course of training and how well education and training has prepared them for those challenges,
To analyse the major challenges the young people encounter when taking their journeys to self- employment,
To suggest policy recommendations to be adopted so as to improve the labour market situations for the young people in Rwanda.
1.3.3 Research Questions
What are the economic journeys taken by young people from vocational training into self-employment in Rwanda?
What are the perceptions of young people over the challenges they face during the course of training and how well education and training has prepared them for those challenges?
What are the major constraints the young people encounter when taking their journeys to self-employment?
What policy recommendations should be made to encourage an environment of adequate skills and capability desired in the labour market?
1.4 Relevance and justification of the research study
The research study is relevant as it tries to make a good understanding of the concepts of self-employment developed by training and a labour market concept which is rather weak among several vocational training institutions in Rwanda. This paper provides response to the common mismatch of skills acquired from vocational institutions that impinges so much on the position of young people in Rwanda`s current labour market. It will also enable the concerned parties to recognize whether self-employment policies and programmes in place are relevant towards addressing the high rate of unemployment among the young people in Rwanda.
It will create a platform to initiate debates on youth employment promotion policies which might be useful in addressing the unemployment problem which has affected the young people in Rwanda`s labour market and the world of work in a global perspective. Besides that, this research provides useful literature and knowledge for future reviews based on the theoretical views and opinions of several cited authors from the world of academia that are included in this research paper.
This research study is also relevant especially when it seeks to make policy recommendations as an aspect that will help in building institutional capacities and as well as building human capabilities.
1.5 Research Methodology and sources of data.
The research is based on both primary and secondary data. Primary data was collected from respondents from the chosen area of study comprising of the beneficiaries of training programmes. The researcher identified young individuals who are graduates from vocational training institutions. The total number of interviewee was thirty five (35) respondents from Gasabo District and Government officials. This helped the researcher to collect data on the quality of the education system provided by the vocational training education institutions in Rwanda and was able to capture information on the perceptions of young people on the standards of the education system provided to them, after they graduate and how it is helpful or inadequate in as far as labour market is concerned.
1.5.1 Sample size and sampling procedures
The ideal exercise in a research study is to find data from the whole population. This would guarantee maximum coverage/ treatment of population concerned in the research study. However, due to lack of resources, it was not feasible to study the whole population; In this case, a sample size was then deemed necessary and essential to satisfy the researcher`s study.
With the use of purposive sampling method, respondents presumed to have clear/understandable and enough information concerning the economic journeys of the young people into self-employment were consulted.
To get rich and enough information about young peoples’ transition into self employment, I purposively selected thirty (30) self-employed young respondents. For better understanding what the government is doing / planning to encourage self employment to young people in Rwanda, I selected 5 Government officials, two from the Ministry of Public Service and Labour, one official from the Ministry of Youth and two officials from the Ministry of Education and were interviewed. Thus, the sample size of the study totalled to 35 respondents. The selection of 30 young respondents that were interviewed fell in age range of 15-35 years old as being stipulated by Rwandan constitution of 2003-2004 determining who the youth are.
1.5.2 Research techniques
To get primary data, it was decided to interview 35 respondents. Before holding interviews with respondents, the researcher had first to make contacts with the help of telephones calls. Using interview guide, the researcher interviewed 30 young self-employed people in Gasabo District. To know what the government is doing or planning for self employment for young people in Rwanda, 2 officials from the Ministry of Public Services and Labour, 2 officials from the Ministry of Education and 1 official from the Ministry of Youth were also interviewed. Semi-structured interviews each lasting for up 30-35 minutes were conducted. The interview questions varied in form and emphasis based on the interviewee but were based on the research questions mentioned above. In some cases, some prompts were incorporated, for example, around the nature of self-employment and the transition of young people as a starting point for informants giving their views about self-employment as a form of employment in the labour market.
With respect to the qualitative practice (Davies: 1997), a mostly unrestricted/open-ended interview timetable was used to guide the conversation and discussion. The interview calendar was purposefully considered to allow informants to articulate/express themselves unreservedly and to raise their personal issues and concerns relating to the transition of young people towards self- employment in the real world of work.
The interview schedules helped very the researcher to understand as well as studying the attitudes, values, beliefs and motives the young people have in as far as self-employment is concerned. The study interviews were conducted in English, but in some cases Kinyarwanda (local language) was used, with the interview transcripts which was translated into English afterwards.
For the concern of secondary data collection, a desk study was used. The study concentrated on secondary data from diverse sources, but mainly from the ISS/Erasmus University library, official government publications/documents from Rwanda related to the issue of investigation, Internet sources was very crucial among other sources, Many reports and other relevant sources were also consulted during the research paper writing period.
1.6 Scope and limitations of the research study
This research study focuses on the young self-employed people, and who have above average levels of education in Rwanda taking Gasabo District in Kigali-City as a case study.
Due to time restriction and inadequate resources/funds, the research study could not cover the entire country, the research was conducted in Gasabo District in Kigali- City. Gasabo District being surrounded by the three Districts that constitute Kigali-City Mayor ship was considered because of the following reasons:
Gasabo District is situated in the centre of Kigali-city where most of the commercial activities and many businesses takes palace, and as well government administrative offices and none governmental organization offices are located. The district is presumed to be having somewhat/ fairly well developed infrastructures in place as well as road networks, water, electricity with the planned settlements and more easily reached communities and this can facilitate those who seek self-employment and as well as employment creation per se. In this case the young people after their training may decide to stay around with their relatives while trying to find what to do in their bid to seek self-employment in tight labour market.
Gasabo District was chosen because the district is presumed with a big number of young people that are self-employed relatively bigger compared to Nyarugenge and Kicukiro Districts that also make up Kigali-City. Gasabo Districts takes a bigger part of Kigali-city.
Pertaining to the limitations, the researcher came across quite a lot of challenges. Which created some unexpected inconvenience in the field during data collection and they may included; Bureaucratic tendencies from some of the selected interviewees especially government officials was the most problem that frustrated the researcher so much. The scheduling of appointments with the respondents was proved to be time consuming and took most of the researcher’s time. However, to overcome this, several appointments were made and this pro-longed the time of data collection than the earlier planned time. Further to that, with the introductory letter from ISS/Erasmus university stating the intention of the research, several respondents started welcoming the researcher and they could spare 20-35 minutes for discussion during interviews.
Language problem also delayed the progress of data collection in the field at several instances. This is mainly for the reason that most of the Official documents are prepared in French and the responses of the young people were given in Kinyarwanda Language. Irrespective of such difficulties and challenges the researcher encountered in the process of data collection, on the other hand, the data collection went well because some friends of mine helped me in translating a number of helpful related materials such as policy documents from French to English and some from Kinyarwanda into English.
Samer and Bennell (2001:7) pointed out that “there are generally serious inconveniences with the way in which persons are selected and traced,” This implies that, the samples size were biased and not really representative of the whole population size of the young self-employed people under investigation. In this case, there could be many other young people who might have come up with different views and responses during data collection.
1.7 The organization of the research paper
This research paper is structured into five chapters. Chapter 1 presents a general idea of what this research paper expected to find out and how to tackle it. It includes the general introduction of the research, problem statement of the research, the relevance and justification of the research study, objectives and research questions of the research study. It also highlights the scope and limitations of the research, the research methods and the research techniques that were used in collecting the desired data.
Chapter 2 is made up of the conceptual and theoretical framework of the research. This section presents in length and gives a discussion on the concepts used according to a number of scholars. Basically this chapter concentrates rigorously on the associated concepts like: youth, transition from school-to-work, self-employment, competencies, skills, determinants of self-employment, social networks, importance of self-employment and limitations/ barriers that self-employed young people are troubled with and employment search theory.
Chapter 3 presents an overview of VET programmes in the Rwandan context by giving the general picture of TVET education system pertaining to vocational education and training provided to the young people in Rwanda (TVET as an umbrella for VET programmes).
Chapter 4 presents research findings and interpretations. It starts by presenting the general profile and the structure of Gasabo District as the case study for this research. It evidently shows how the collected data was analysed in connection to research questions, the economic journeys young people take to become self-employed, perceptions and expectations of the young people, forms of economic activities being done by the young people in the context of Rwanda`s labour market, factors contributing to long duration of transition to self-employment among the young people in Gasabo District.
Chapter 5 offers some of the critical reflections on the research findings and recommendations and general conclusion that covers a summary of responses to the research questions and objectives of this research study.
Chapter 2: Conceptual and Theoretical Framework
This chapter presents the conceptual and theoretical frameworks and which also provides a basis for this research. It covers concepts such as; “youth” in other words who are the young people?, Skills, competencies, self-employment, wage employment, determinants of self-employment, social-networks, importance of self-employment, limitations/ barriers of self-employment and that is also followed be the employment search theory.
2.2 Working concepts and definitions
The concept of youth/ young people varies from one community to another, depending on customs and traditions, social behaviour and location (Curtain: 2001). According to the United Nations (UN), the standard clarity of youth comprises of people aged between 15-24 years old. However, In Rwandan context, with reference to the current constitution version 2003-2004, it defines youth as a fraction of people aged between15-35 year old.
As cited by Awortwe-Abban (2009) in the words of Nelson and Winter in their perspective of evolutionary theory, they defined the concept of skill as “a capability for smooth progression of coordinated performance that is normally effective relatively to its objectives, given the context in which it often occurs” (Awortwe-Abban: 2009). In this case, individuals or young people may be able to engage themselves in different undertakings whereby, they can be able to discover, consider and at the same time evaluate possible likely changes in their ways of doing things. This concept of skill is applicable to this research study mainly because without provision of proper and adequate skills such as technical skills, business skills and many other skills to young people, entering the labour market could be difficult. This could also be a hindrance to labour supply in any labour market and self-employment opportunities per se. thus, many opportunities could remain idle and untapped mainly not because of restrictions but due of lack of skills desired in the labour market.
This concept of competence refers to a certain level of standardized requirement for an individual to practically perform a specific occupation or a task in a world of work. However, competencies are often judged as a combination of knowledge and skills required for an individual to perform a specific role adequately and professionally (Raven and Stephenson: 2001). This concept is applicable in this research study because, it is part of the training output acquired during the period of career training from vocational training institutions. And once young people are not given chance to learn some of the desired competences which would make them ready to be self-employed, they can always remain unemployed and dependants on the existing employers of the formal sector and informal sector.
According to Eraut (2003), competence is defined as; the ability of individuals to perform errands and roles necessary and obligatory to the expected standards while Mandon et al (1998) admittedly, pointed out that, competence refers to the capacity of a person to do something. It should however be noted that competence is viewed as being holistic because it is comprised of the subject matter of knowledge, abilities and qualities of doing work or any activity in a diverse manner. However, for purposes of this study, the concept of competence could imply as the capability to apply knowledge and skills in practice. In this case, lack of vocational based training competencies could hinder the economic journeys that young people make to start self-employment in a tight in labour market. In other words, why the very people who are prepared for self-employment find it so cumbersome join the labour market. In this case, the research findings will provide suitable answers to such alarming issues.
From economic perspective, self-employment is a form of economic activity that provides the opportunity for individuals to improve their quality of life and/or for exploring creative entrepreneurial opportunities (Bryson and White: 1996). They argue that self-employment especially among the young people is considered mostly to be economically vulnerable and this could be a result of lack of improved economic policies and programmes that promote and facilitate self- employment amongst the young people through the provision of access to credit and business development services, networking as well as other forms of support.
The young people consider self-employment as their best preference. This is based on the competencies they are given from the training which also allows them to venture into new small economic activities or entrepreneurial activities . There is also a range of motivating factors such as; the desire for self-expression and independence (Bryson and White: 1996 ). The purpose of self-employment as a concept in this study is to address the journeys and transitions that young people take in order to start their own employment that is related to their professions, skills and competences they possess as VET graduates. Despite the fact that, all VET young graduates are trained to be in specific occupations many fail to become self-employed rapidly. This will be evidenced in the subsequent chapters.
2.2.5 Wage employment
This is a form of employment where a person receives wages in return for selling his/her own labour. Wage employment also occurs in both the formal and informal economy. Blanchflower (2000) pointed out that, “many young people start out in wage employment and switch to self-employment at some point in their career.” this could be a reason of financial constraints and it happens when your entrepreneurs wants to build up savings in their first job/employment. The difference of wage employment and self-employment is that wage employment involves less risks than self-employment in the labour market.
2.3 Transition from school-to-work/ labour market
Conceptually, the transition from school-to-work is considered as a new development which is associated with change of life in development. In addition to that, it is also seen as a period where by individuals leave formal education and join the labour market. This form of transition takes place at any level of education. The school-to-work agenda gives chance to a number of long standing issues concerning schooling, employment creation and training programmes. These issues are now seen as part of a distinct practice and process.
According to (OECD, 1998) the transition from school to work is defined as that period between the end of compulsory education and accomplishment of steady employment opportunity.
The success of transition from school-to-work for young people highly depend on how such young people are able to secure economic activities and any other form of employment occupation in world of work that is gainful, which is the principal aim for young people when they finish formal education. For the case of developing countries like Rwanda respectively, the possibilities of employment opportunities are largely embedded in the informal sector, which is predominant in the labour market of Rwanda and this is because there are few opportunities in the formal sector of the economy (Nwuke: 2002). The young people often desire to be helped in taking helpful actions when they are to discover how to make satisfying lives on their own sake. In this case, the school-to-work transition for young people requires steady forms of mentoring and apprenticeship programs to become the core practices in the whole process which pertains school-to-work- transition in the labour market.
Active labour market policies can also play an essential role in facilitating the transition school to the world of work. These policies mainly include formal employment and self-employment policies (Higgins, 2001: 110). The relevance of such policies is that they play an imperative role by incorporating the needy young people who fails to be absorbed into the labour market with some skills which enables young people to be more active. Such policies would include individuals capabilities. Blackely, (1990) pointed out that, such policies can facilitate the process of economic journeys by leading to programmes which makes economic journeys for young people successful and productive.
2.4 Determinants of self-employment for the young people
Different factors determine self-employment outcomes for young people in both formal and informal sectors in developing countries. For self-employment to prevail in any economic situation, the following factors seem to be crucial: Access to credit and business development services such as basic business skills, business experience and availability of market opportunities play a fundamental role in the establishment and exploitation of gainful employment to young people (Chigunta et al. 2002: 25).
Access to finances is a decisive factor for the creation of self-employment to the young people. However, young men and women often faced with the general lack to access credit in order to start their own entrepreneurial businesses and often they do not have collateral securities to have access to credits from formal financial institutions. This has been the case in many countries including the common wealth developing countries ( Prodromos et al.1997: 126).
In addition to access to finance, business development services such as training, mentoring marketing assistance, etc. are also important for the success of youth businesses. These services help young entrepreneurs to gain the skills and experience needed in the labour market. Early and appropriate business training, mentoring and counselling are essential for the survival of youth businesses (Prodromos et al.1997: 127).
Possession of skill that can be used in the labour market for gainful employment is also equally important. Business skills and experience in the business one intends to pursue is important for successful self-employment. Provision of mentoring and business counselling services help in starting youth entrepreneurs to overcome the problem lack of skills and business experiences (White and Kenyon: 1993:19).
Presence of demand for the products and services which one intends to supply to the market is even more crucial. In fact, existence of market niches determines the success of any self-employment endeavours (Chigunta: 2002: 9). Lack of adequate market is often a cause for many business failures. In this regard, presence of market information is important in accessing the market for the products and service in mind.
It should also be well-known that any one of these inputs alone does not work. For instance, skills training alone do not lead to self-employment. It is a combination of many factors which lead to successful implementation of self-employment. Thus, this will help the research to analyse the major challenges the young people encounter when taking the journeys into self-employment in a tight labour market in Gasabo District.
2.5 Social Networks
Peck (1993) and Fingeret (1983), pointed that, social networks includes “a person’s closest family and friends”. While Stack .(1974) argued that, “The family could consist of people who are fictive family”. It can also happen to those people considered to be having relations based on their nature of association and family links with elders and as well as other class categories. (Sloan, Jason & Addlesperger, 1996) pointed out that, sometimes the network is helpful and unhelpful in a sense that social networks vary from the intention for involved in it. The experience of the young people, in the perspective of entrepreneurship especially in developing countries is based on family system embedded in different societies, and this represents a social network as a concept in this study. This set of family connections has lots of significant features to be noted and considered by professionals and Trainers for the prospective it promises as a model for triumphant business literacy education involving young people.
“The kin related family, a variation on the nuclear family, is cited as one of the features of people from developed societies” (Gutman cited in Franklin, 1997). Putnam (2001) has also recognized the prosperous foundation of value that networks provide through the different levels of formal and informal relations. He argued that, having relations with those who are skilled and competent of giving one a help in public/ private life, is thus, an imperative feature of the traditions among young people who are inquisitive/ rather curious in making their career into self-employment.
2.6 Importance of self-employment to young people
There is a large pool of young people currently out of work, some of them might benefit from the opportunity of taking up self-employment. Unemployment rate in Rwanda seem to be higher in relation to the working population. In addition, over half of young people of working age (62 per cent) are classified as economically inactive and about one third of them say they would like to work. The scope for raising employment rates in general among young people and self-employment rates in particular, is considerable,( RoR:2007: 6).
Furthermore, the discrimination experienced by young people attempting to gain and retain employment (Meager et al.1999; Ravaud et al.1992) may make self-employment seem a more attractive option especially for VET graduates who are prepared for self-employment. Improving self-employment opportunities for young people could therefore meet at least three policy objectives; It would promote entrepreneurship among a young people, it could help to prevent social exclusion among a vulnerable group of young people, and it could narrow the gap between employment rates for young people and the population as a whole. Employment policy for young people and the population would focus on liaising with employers and placing individuals in jobs, with peripheral attention to self-employment.
2.7 Limitations/ barriers of self-employment to the young people
As already stated, promoting self-employment makes important contribution to youth employment creation in many societies of developing world. Generally, successful youth entrepreneurship programmes and policies lead to successful businesses, which can also facilitate the creation of self-employment to young people in the any labour market. This indicates that, there are some of the personal cases of entrepreneurs when individuals creates self-employment for themselves and for others.
A word of forewarning, self-employment policies and programmes should not be seen as a panacea for the persistent youth employment problems observed in many countries of the world, both developed and developing countries. In fact, one has to admit that youth self-employment strategy is not a lasting solution to the high rate of youth unemployment. As O` Higgins concludes, “ It is impractical to hope that self-employment programmes will solve the labour market challenges and barriers of all jobless young people; not all young person has the makings of an entrepreneur” (O`Higgins, 2001:164). Nevertheless, self-employment policies and programmes alone cannot be an answer to the employment exertion of the young people in the labour market in any society.
It is noticeable that all jobless young people are not likely to be self-employed. The Republic of Rwanda also takes concern of the limitations of self-employment among other strategies in order to ensure economic development. There is always a strong question of promoting employment for the young people and provides them with several options after completion of their vocational education and training programmes ( RoR: 2008) .
Youth employment promotion programmes and policies do not also address the structural causes of youth unemployment seen in many low income countries like Rwanda. Such programmes, for instance, can not deal with a divergence and mismatch in the labour and poor macro economic performance but to a certain extent they make efforts to tackle the dilemma of youth unemployment and its consequences such as social exclusion, and other contemporary social problems in as far work is concerned.
Hence, self-employment policies and programmes are not sufficient and in this case, other policies and programmes, may be deemed necessary to address the structural causes stated above, are needed. This would imply that other strategies must to be introduced for successful employment creation for young people in developing countries as well as Rwanda.
As noted in the problem statement, there is a need for a international strategy approach to promote employment for young people in low income countries. In this regard, arguments that focus on the significant of self-employment programmes in relation to other policies and strategies for example, those who argue for a matching role for self-employment options suppose that weight must be given to policies instead of self-employment. They wind up that self-employment programmes should not be seen as a major policy response but should complement other policies such as wage employment promotion policy. However, others argue that without vocational education and training programmes in place, self-employment for young people could be very difficult and yet, often young desire occupational skills and making business environment more conducive (ILO, 2001:31).
Poor economic conditions that do not favour the promotion of wage employment for young people in most developing countries. In other words, the poor macro economic performance limits the capacity of both the public and private sectors to create employment opportunities for the young people as well as adults (Higgins, 2001). Economic growth is still a challenge and the economies in developing countries failed to create jobs for an increasing number of job seekers including young people from VET programmes. Even in countries with positive economic growth, there is little evidence which shows the relationship between economic growth and employment generation due to lack of adequate empirical research (Grilli and Zanalda: 1999, 8). The above situation significantly reduced the chances of wage employment for young people.
Moreover, the informal sector is still an important source if employment for the majority of the population is to be potential for creation more jobs. For example, more jobs are created in the informal labour market than the formal labour market in countries with low levels of economic growth ( Haan 2003: 105). This shows the important role the sector can play for the creation of employment opportunities and indicates that job creation efforts in developing countries can not underestimate the potential of the informal sector.
Thus, self-employment strategies seem to provide feasible options in situations where governments have limited capacity to implement other policies such as wage employment. For instance, in the developed world and few countries from developing world, self-employment created new jobs for youth labour which could not be absorbed due to a decline in employment in the public and private sectors ( Prodromos and Chris, 1997: 223).
2.8 Employment search theory
According to the ideas of neo-classical economics, human capital oriented employment search theory, the unemployed person/ young people searches for a job in order to maximise their utility. In the searching process the young people chooses employment search passion and the reservation benefits or wage (Devine et al ,1993)
The theory of employment search uses the tools of chronological statistical choice for instance, the theory the worker`s difficulty of meeting the opportunities for employment in a decentralised labour market (McCall: 1970). Given the fact that employment search information is difficult and expensive, often young people without employment/jobs have to seek-out the most favourable strategy which would take full advantage of the present value to their future returns. In addition, since the markets are imperfect, employment opportunities are not often available (McCall: 1970). Burda et al (1996) pointed out that, “ young people do not search for employment merely in their area of residence but they can also search employment opportunities in other areas distant districts as well”
Based on this model, the issue of distance also becomes an imperative factor affecting the employment search efforts particularly the vulnerable/ helpless young people who actually do not have enough resources to make it easy for them to move to such distances searching for employment in other regions of the country.
According to Holzer (1988), he developed a model that relates to the preference concerning employment search method and intensity to the expected cost and usefulness of search methods. He argued that ‘‘the individuals who are unemployed do often take full advantage of their utility by choosing a stipulated wage’’ for instance the minimum wage which is acceptable for them to do the job. Holzer further argues that, another vital factor that is influential to employment search behaviour in the midst of those who have desire to find employment is the financial growth that is, if employment is accessible and be set up.
It is also habitual or rather normal to break up the channels through information pertaining employment opportunities is accessible into two categories; formal and informal (Norris:1996). To start with the formal information, there are information networks which often include both public and private employment agencies, employment openings in the media and internet search while the informal information channels comprise of the employment offers on notice boards of the business centre houses, but in most cases information is gathered through social networks.
Numerous studies have constantly found out that informal networks are essential means of discovering employment opportunities (Granovetter, 1995). The significant hypothesis pertaining to the strong point of weak ties, in which it is argued that possessing social ties with people in networks far-away from oneself renders the best opportunity for one to access the resources of the same network, for personal interest (Granovetter, 1995).
However, the application of employment search theory in this research paper was useful in analysing how the young people join the labour market situation for young people, after their graduation and factors that tend to help young people to get possible alternative undertakings/employment that could smoothen their economic journeys to self-employment
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