The project focuses on the labour market conditions in Ethiopia. Within the project it is important to examine the effects of labour market conditions. State Institution programmes which are properly enforced like the recent pension reform in Ethiopia are the main part of the project’s research. The project intends to analyse the current reform because existing labour markets studies on Africa examine the effects of minimum wage and job security measures, and therefore, there are no studies on government mandated employee benefits. Moreover, the employment effects of labour market regulations cannot be fully understood by examining real wage adjustments in the absence of the price elasticity of labour demand and employment variation.
The proposed research project will examine how this new reform will affect employment at the firm and industry level. Given the high urban unemployment rate in Ethiopia, which stands above 50% among the youth, it is crucial to understand the impact of the pension reform on the private sector’s ability to create better quality jobs as well as its implications on productivity and wages. This should be examined in the context of the rapid economic growth in Ethiopia in the past two decades and the government’s massive infrastructural investment programme to facilitate private sector participation.