Street based self-employment: A poverty trap or a stepping stone for migrant youth in Africa?
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OriginalversjonPresented at: 49th Annual Conference of Canadian Economics Association
Street vending is a common phenomenon in urban areas of Africa. Although such street based self-employment activities often lack legal recognition and are sometimes criminalized, significant share of the youth labor force in urban areas earn their livelihood from such activities. This study examines whether street based self-employment is a viable livelihood or a poverty trap for youth migrants. The study is based on a survey of 445 youth who are engaged in shoe shining and coffee vending activities in two urban areas in Ethiopia. We found that street based self-employment is indeed dominated by migrant youth. In this sample, 98% of all the youth engaged in the street based self-employment are migrants from rural areas or smaller towns. We found that the average monthly earning of these self-employed youth is better than the minimum wage in public sector and much larger than the official poverty line. We found that most of the youth consider this as transitory employment and accumulate skill and capital with a view to establishing their own enterprise or joining skilled wage employment. While young women are in general found to be less likely than young men to seek exit out of street based self-employment, education increases the likelihood that young women aspire a change in their employment situation. We also found that youth with better-off parents back home and those with larger network in their new residence are more likely to change their current occupation.