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The youth labor market in African countries especially in Ethiopia is characterized by high unemployment compared to adults but there are few studies published that investigate the underlying risks (Haile, 2003). Unemployment had been a serious problem of international economy from the period of great depression where higher level of unemployment existed in the world. Unemployment is the macroeconomic problem that affects the livelihood of the people. For most people, unemployment is a reduced living standard and psychological problem. As indicated in Muiya (2014), youth unemployment is a pressing economic and social issue in society. It poses a serious political, economic and social risk to the country and its leadership. This makes unemployment to be a frequent piece of political debate (Mankiw, 2000).
Despite the use of the term youth varies in its implication and age boundaries from culture to culture, it is widely defined as a transitional age from `childhood` to `adulthood` (ILO, 2012). It is a life phase when people have to face and negotiate a complex interplay drives from emotional, social and economic changes in the process. However, this linear categorization of youth and youth culture don`t represent all youth. Because first, youth culture can be mediated by socio-cultural and historical context of the society, second who are youth and what they do is conceptualized from the rich countries chronological age perspective, third for some people progression to adulthood may not be attainable (Cole, 2005).
According to ILO (2012), unemployed person is defined as someone who does not have a job but is actively seeking work. ILO further clarified that in order to qualify as unemployed for official and statistical measurement; the individual must be without employment, willing and able to work, of the officially designated 'working age' and actively searching for a job. But according to Izzi (2013), the ILO definition of unemployment has been criticized for its rigidity to accommodate peoples temporarily laid off or peoples discouraged of job perspectives.
As stated in UNDESA (2012), by 2010, over 75 million young people were unemployed across the world. The global youth unemployment rate was 12.6 per cent, while global adult unemployment rate was 4.8 percent.
Ethiopia has the largest youth population, and youth labor force constitute a fast-growing proportion. Despite the Ethiopian government has made some efforts to reduce urban youth unemployment, it is growing tremendously. Urban youth unemployment in Ethiopia is fast growing mainly due to the imbalance between the demand and supply sides of the job market (Ethiopian Economic Association, 2008). In urban Ethiopia, the labor force grows with an increasing proportion while the opportunity of employment is inadequate to absorb the labor market entrants and thus, unemployment presents a particular challenge (Kibret, 2014). Unemployment is a critical challenge to Ethiopia though the overall unemployment rate declined from 20.4 percent in May 2009 to 17.5 percent in March 2012 (Kibret, 2014). Kibret further stated that unemployment rate of literate persons (18.1 percent) is higher than the illiterate persons (15.2 percent) which shows failure of the education system.
Youth unemployment rate has become increased in major cities of Ethiopia. The city of Hawassa is among the major cities of Ethiopia which is growing fast. According to CSA (2014), from among 8,222,359 economically active population of Ethiopia, 1,432,368 youth were unemployed. Similarly, from 69,082 economically active youth of Hawassa city, 11,793 were unemployed which counted 17.1 percent.
This study has focused on Hawassa City because, these days large influx of unemployed young people has become increased particularly since the establishment of Hawassa Industrial park. From different corners of the country, young people are migrating to the city of Hawassa which would expose them to different vulnerabilities. This shows that job opportunities in different areas of the country are very scarce. There is also increased number of graduate unemployed youth due to imbalance of labor demand and supply. Young people who stay unemployed become dependent on their families’ economy. This affects the economic status of the youth and their parents. Besides, it also affects their social and psychological wellbeing.