COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMIICS

URBAN UNEMPLOYMENT: CAUSES AND CONSEQUENCES

(CASE STUDY OF MAYA CITY)

RESEARCH PROPOSAL SUBMITTED TO THE DEPARTMENT OF

ECONOMIICS IN PARTIAL FULFILMENT FOR THE REQUIREMENT
OF BACHELOR ART (BA) DEGREE IN ECONOMIICS

PREPARED- BY: ASCHALEW DESTA: ID/NO 3939/14

ADVISOR: PETROS. T (MSc)

January 2025
Maya City University, Maya City
 ACRONYMS AND ABBREVIATIONS

EEA- Ethiopian Economic Association

CSA- Central Statistical Authority
ILO- International Labor Organization
LDC- Less Developed Countries
NGO- Non-governmental Organization
MOLSA- Ministry of Labor and Social Affairs
OECD- Organization for Economic Co-operation and Development.

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 TABLE OF CONTENTS

Contents
ACRONYMS AND ABBREVIATIONS ..................................................................................... ii

TABLE OF CONTENTS ............................................................................................................ iii

CHAPTER ONE ........................................................................................................................... 1

1. INTRODUCTION ................................................................................................................... 1

1.1. Background of the study .................................................................................................. 1

1.2. Statement of the Problem ................................................................................................. 2

1.3. Objective of the study ...................................................................................................... 3

1.3.1. General objective ...................................................................................................... 3

1.3.2. Specific objective ...................................................................................................... 3

1.4. Research questions ........................................................................................................... 4

1.5. Significance of the study .................................................................................................. 4

1.6. Scope of the study ............................................................................................................ 4

1.7. Organization of the Study ................................................................................................ 4

CHAPTER TWO ............................................................................................................................ 5

2. LITERATURE REVIEW ........................................................................................................ 5

2.1. Definition of urbanization unemployment ....................................................................... 5

2.2. Type and cause of Unemployment ................................................................................... 5

2.3. Theories of Unemployment .............................................................................................. 6

2.4. Special features of youth unemployment ......................................................................... 7

2.5. Magnitude and Nature of urban Unemployment in Ethiopia ........................................... 9

2.6. Empirical literature ......................................................................................................... 10

2.6.1. Unemployment in Ethiopia ..................................................................................... 11

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CHAPTER THREE: ..................................................................................................................... 14

3. RESEARCH METHODOLOGY .......................................................................................... 14

3.1. Description of Study Area .............................................................................................. 14

3.2. Research Design ............................................................................................................. 14

3.3. The Study Population ..................................................................................................... 14

3.4. Sampling Technique and Sampling size ........................................................................ 14

3.5. Method of data collection ............................................................................................... 15

3.6. Data analysis .................................................................................................................. 15

3.7. Ethical Considerations.................................................................................................... 15

4. WORK PLAN........................................................................................................................ 16

5. BUDGET BREAK DOWN ................................................................................................... 17

6. REFERENCES ...................................................................................................................... 20

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 CHAPTER ONE

1. INTRODUCTION

1.1. Background of the study

Unemployment is widely regarded as a major social and economic global problem that attack both
developed and developing countries especially the developed nation had come across the worst
unemployment problem.
Most countries in the world suffer from sever great depression and high unemployment in different
times. For instance a situation was seen in United States during the 1930s. At its worst during in
1933 it reached a peak of about 25% of the labor force was unemployed and employment rate was
4.8% during 1960s, during the 1970s it rose to 6.2% and during the 1980s it rose further to 7.3%.
This trend broke in the 1990, when the unemployment rate tells to levels not seen in about 30
years. In 1998, the unemployment rate was just 4%. The unemployment rate, however, abruptly
stopped in 2008 when the United States was in a deep recession after a serious financial crisis. The
very rapid rise in the unemployment rate after the financial crisis was remarkable, from 4.6% in
2007 to 9.6%. (Borjas, 2010)
Today many developing countries are plagued by historically unique combination or massive rural
to urban population movements, and growing urban and rural unemployment and under
development. Substantial unemployment in less developed countries economies is probably one
of the most striking symptoms of their inadequate development (Todaro, 1996).
One of major consequences of the rapid urbanization process has been seen in the supply of job
seekers both in the formal and informal sectors of the urban economy. In many developing
countries the supply of workers exceed the demand as a result in bring extremely high rates of
unemployment (Todaro, 1996).
Today the urban unemployment rate increase in Ethiopia due to the massive movement of peoples
form the rural a rate to get education services and better living standard. For instance the 1984
and population and housing censuses and the 1999 and 2005 national labor force surveys implied
that the number of unemployed population stood at about 170 thousand people in 1984, 771

1
thousand people in 1994 , 2.2 million people in 1999 and 1.7 million people in 2005. This would
imply from 14.6 million in 1984 to 31.4 million in 2005. This data shows that while employment
has been growing by 5.5%, the average rate of unemployment during this period was 4.3 %. The
status or structure of employment indicates that the majority of economically active peoples are
self-employed, through its percentage share declined from 59% in 1984 to 41% in 2005 while the
share unpaid family workers increased by 32% during the same period. The Ethiopian national
labor survey data of 2006 also shows that 54% the surveyed reported that they had been
unemployed for a period ranting from 1 to 6 months. About one fifth reported to have been out of
work for a period of 7 to 12 months. About 7% were unemployed for over 2 years. For all years
the major factors causing capacity underutilization were more or less the same. For 30.5 of the
firms, on average, the outstanding problem was lack of market or stiff competition from cheap
imports. Shortage of raw material supply stands as the second most constraining factor, according
for about 27.9% of the cases. More over shortage of electricity and water supply was the third
crucial factor during the review period. The largest population of urban unemployed population
was between the age of 20 and 29 years. This age group alone constitutes about 18.4% of urban
employed population in 1999. While the share of this age group in total unemployed population
was about 24.5% in 2005.
1.2. Statement of the Problem

Unemployment is the macroeconomic problem that affects people most directly and seriously, for
most people, the loss a job means a reduced living standard and psychological problem. It is no
surprise that unemployment is frequent piece of political debates and those politicians claims that
their purpose policies would help to create jobs (mankiw, 2002).
Most of the time major problem faced by the peoples the problem of unemployment. Population
growth as a great impact for the expansion of urban unemployment and rural unemployment,
specially this problem create economics and social problem that prevent development. (Todaro,
1996).
Likewise major problem faced the Ethiopian people is the problem of urban and youth
unemployment due to the massive movement of peoples from rural area to urban area to get
education services and better living standard. For instance the 1984 and 1994 population and
housing censuses and the 1999 and 2005 national labor force surveys implied that the rural

2
unemployment rate were 0.4% in 1999 in ,0.7% in 1994, 5.1% in 1999, 2.6 % in 2005. But the
urban unemployment rate was much higher during all the periods. In a particular urban
unemployment rate were 7.9% in 1984, 22% in 1994, 26.4% in 1999, and 26.6% in 2005. Similarly
the rate of unemployment for males and females, the female’s unemployment rate claimed to about
three-fold of males (i.e. 4.3 versus 12.5% in 1999 and 2.5% versus 7.8% in 2005). The gap in
female and male unemployment rate was absorbed in both the rural and urban areas. And
unemployment rate in the regions, the Dire Dewa city administration registered the highest urban
employment rate at 35.4% compared to all the regions in 1994 followed by the Addis Ababa city
administration at 35.1%. And unemployment by literacy status showed that about three quarters
of the unemployed population in urban centers are in the rural are literate (EEA, 2005/06).
There were some studies conducted before in this related problem. For instance the study by Tesfa
Chekole, (2004) on causes of unemployment in the case of Dilla town examined that it is evident
that unemployment affect specially under the age category (21 - 25). The major cause for
unemployment is unfair competitive environment in job vacancies and scarce job opportunities.
Even if they need to start venture, unemployed individual have to go through aright economic
crunch. They get unfair competitive environment in job vacancy this leads them to venture out to
other town for green pastures. Facing a hostile environment which no employment opportunities
makes them frustrated and leads them in to unnecessary activities like drinking, smoking, gamble
and other crimes.
Even though such studies were conducted on that topic the studies in urban unemployment causes
and consequences are quite limited. So the study will try to investigate the major causes and
consequence of urban unemployment in particular area of Maya City.

1.3. Objective of the study

1.3.1. General objective

The general objective of this study is to assess urban unemployment causes and consequences
case study of Maya City.
1.3.2. Specific objective

The specific objective of the study can be;

 To see the trend of unemployment in Maya City.

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  To assess the cause of unemployment.
 To examine the consequence of unemployment problem in Maya City.
 To come up with some possible solutions for the problem.
1.4. Research questions

The study would have answered the followed research questions.

 What is the trend of unemployment?
 What are the causes of urban unemployment in the study area?
 What is the contribution of government in reducing the problem of unemployment?
 What is the contribution of government for urban unemployment causes and
consequences in the study area?
 What are the consequences of unemployment?
1.5.Significance of the study

The study is significant for several reasons, among others to mention too few. The study deals with
the problem of urban unemployment, there for such study may help policy makers and others
respective stalk holders to put their effort to achieve better resource allocation in general and
reducing unemployment in particular.
1.6. Scope of the study

As regard to the coverage or scope of the study, urban area with a particular emphasis of Maya
City is taken as a point of reference among the major youth in town due to different reasons such
as migrating from the rural area to get job and education service. In addition to this the study will
be concentrates on this area due to finance and time constraints

1.7. Organization of the Study

The research paper will be organized into five chapters. Chapter one contain background of the
study, statement of the problem, research questions and hypothesis , research objectives,
significance of the study, limitation of the study, definition of terms. Chapter two provides
literature review about the study area which is reward and motivation. Chapter three presents the
Methodology which use in the research and this include research approach and design, population

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and sample size, methods of data analysis. The fourth chapter deals with comprise time and activity
plan and finally budget plan will be included at the end of the study

CHAPTER TWO

2. LITERATURE REVIEW

2.1. Definition of urbanization unemployment

Urbanization is the increase in the proportion of people living in town and cities. A cause of
urbanization occurs because people move from rural areas (country said to urban area town and
city). This usually occurs. When a country is still developing. The three main causes of
urbanization in low developed country since 1995are:
1. Rural to urban migration is happening in massive scale due to population pressure and lack of
resources in rural areas there are push sectors.
2. People living in rural area are pulled to the city often they believe that the standard of living in
urban area will much better than in the rural area usually wrong also hope for well-paid jobs.
3.Natural increase caused by a decrease in death rate while birth rate remaining high(todaro,1996)
unemployment is the condition of unwanted job losses or willing workers without jobs. It is as
simple as simple as that only one thing you should pay attention that the willingness of the
unemployed work to employ.

2.2. Type and cause of Unemployment

There are four types of unemployment with their respective cause

1. Frictional unemployment: finding a job takes time, and sometimes the reason a person is
Unemployed is because they are waiting to find a job the work s for them or taking time to decide
between multiple job offers. In addition, it takes time for employees to interview potential
candidates and decide which individual they want to hire.
Frictional unemployment is defined as voluntary unemployment because it results from the time
needed to match job seekers to job openings, according to econguru. Com. One example, of
frictional unemployment is voluntary quitting one job and taking time off to find another one

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2. Structural unemployment: is caused by a mismatch between the needs of employers and the
skills that a work force in a country has, according to Drexel University. For example, low school
s in Ethiopia train more lawyers than the country needs; which can make it difficult for lawyers at
a retail store, but he declines the job because it was the field of work he was trained for.
Structural unemployment also is caused by geographical problems. For example, individuals who
are willing to be construction work might live in a rural area, but the constriction jobs are only
available in urban area.
1. Seasonal unemployment: - is when a person is unemployed because certain types of jobs are
only available at certain times of the year. For example, an individual who plough drive ways
might only have work in the winter and a life guard might only have work in the summer when
it’s warm outside. Another example is that the demand for postal workers usually rises around the
holidays. Seasonal unemployment simply caused by decreased demand for goods or service during
particularly time of the year. Seasonal unemployment is the predictable type of unemployment
because it happens each year.
2. Cyclical unemployment: - is the type of unemployment that’s caused by economic recessions
and is the type of unemployment taking about frequently in the news. Cyclical unemployment is
when there is not enough demand to supply jobs for people with in a country. This type of
unemployment with in a country. (www.ehow.com/info-8182767-4-types-unemployment.htm/).

2.3. Theories of Unemployment

The four major theories’ of unemployment has been discussed as follows. (Smith, 1997).
A. classical theory of unemployment:-
the main characteristics of this theory is that the labor market force of supply and demand respond
to change in the real wages beginning and remaining too high to allow the labor market to clear
government wages and trade union are identifying as significant casual factor consequence
unemployment in the classical system realized up on market not clearing, the polices
recommendation forward from classical analysis of unemployment in that reduced government
regulation and reduces trade union power to make labor competitive in the market.
B.The neo –classical theory of unemployment :-
The neo-classical economical school focused on choice of techniques , what is the a best cost of
minimization

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boundless of factor production.ths, approach avoids focusing on the social possess which
determines incorporation of labor power in to production, labor and capital are reviewed factor
price wise , the relative cheapens of capital in relation labor to the terms of technology
consideration related to the non –sustainability of the capital for labor or what has been dominant
of production problem.
C.Keynesian theory of unemployment: -
Keynesian economic emphasize the aggregate that emerge from the in stability of market force
destabilization full employment Keynesian recognized some unemployment on job to other
(scherish, 1983). Nevertheless in the work of the great person Keynes (1936). Formulated his
history of involuntary unemployment in which workers has ability to located job even when
offering to work at the labor lags because the demand for goods and services land to be behind to
the capacity of economy to produce them.
D.Marxists theory of unemployment:-
Marxist analysis like then Keynesian approach is at the aggregate level in the Marxist traditional.
Unemployment derives from general and normal anarchism of the market economy in which what
power beneficiary for an individual firm is distinction for the system as whole this individual firm
maximizes profit and enjoy their most efficiency production at level of employment that fails to
provide employment for force as whole.

2.4. Special features of youth unemployment

The youth unemployment conceals crucial difference across different group of youths, such as
urban youth, young women and those with lower educational attainment.
A.Urban Vis-a-Vis-Rural Unemployment
The preceding discussion of youth unemployment conceals crucial differences across rural areas.
Like the entire population, the majority of youth live in rural areas. It was shown above that rural
participation rates were much higher than urban participation. Open youth unemployment appears
to be characteristics of urban center, and rose sharply between 1984 and 1994.
In contrast the youth unemployment between 1990 and 1997. We remind that unemployment is
typically not an option in rural area.
B.Unemployment By Gender

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Women have lower participation rates and face higher level of unemployment compared to their
male counter parts. Empirical evidence indicates that the unemployment rate among young women
(20-@$) was 38.7% while it was only 23.2 % for young men in that age category during the same
year. These figures stand in contrast with general trend for the sub-Saharan region where the
unemployment rates for young men (23.1%) exceed those for young women (18.4%). The
unemployment rates for the total labor force, youth and urban youth, disaggregated by gender, the
data indicate that women experience higher levels of unemployment than their male counter parts
in Ethiopia. This is consistently true for all working age groups (10 years and above), for all youth
(both urban and rural youth), as well as for urban youth across all reference periods. This concedes
the with findings on rural vs urban unemployment.
Unemployment rate have increased more for women than for men over the five years prior to 2004.
In 1999 the youth unemployment rate among women was 17.3%, compared to 6.8% among the
men. The urban female youth unemployment rate was 43.7% compared to 29.4 for urban male
youth. This occurs with the findings forms MOLSA data on registered job seekers. In 2003 ,,
female job seekers accounted for 56% of the total register job seekers. This upward trend in
unemployment in part, a consequence of the increased participation of women in the labor force
and in education.
C. unemployment By Education Levels
Unemployment often been argued that unemployment is high amongst educated youth in
developing countries. The empirical evidence is mixed; however , o higgin (1997, 2003)review
the experience of various counties and argues that there is on strong evidence to support the
existence of wide spread educated unemployment in developing countries than in the OECD , and
all evidences counters the notion of an impoverished and disadvantage group of educated young
people in developing countries. For Ethiopia it is clear from the number in figure there are higher
levels of unemployment for those with lower levels of education. The same picture emerges for
youth. The figures reveal some UN employment amongst educated urban youth. Highly educated
(beyond grade 12) unemployment constitutes only a minimal proportion of the total unemployed
in both rural and urban areas . This is also reflected in the data from registered job seekers data
registered unemployed people, 14,701(62%) had some form of secondary school education.

8
A recent survey of unemployment in urban areas reveals an increase in unemployment rates young
people, who have attained high school or a higher educational level. This could be due to a
mismatch between the type education provided at schools and the requirements of the labor market.
2.5. Magnitude and Nature of urban Unemployment in Ethiopia

Unemployment and unemployment continue to be a serious social problem in Ethiopia, despite

some improvements’ in recent years. Force growth and limited employment generation capacity
of the modern industrial sector of the economy. The national rate of unemployment which stood
at 3.6% in 1999, declined to 2.6% in 2005. Open unemployment is not a common problem in rural
in rural areas. Under employment defined as the phenomenon of rural areas. However, this does
not means that under employment is not problem in urban areas. According to the labor force
survey by central statistical agency, under employment is highest among male youth and prime
age adults, and higher rural areas. In particular, the under employment rate of male adults aged
25to39 stood at 20 to percent in 2005.
The under employment rate declined the age of 40 at national levels well as for urban and rural
residents CSA, 2006). High urban to the 2006 employment and unemployment has consistently
declined from 26.2% in 2003 to 22.9% in 2004 and further to 16.7 in 200. Unemployment rate has
been consistently higher among female theme males across the years, 35.2% in 2003, 30.6% in
2004 and 22,1% 11.5% respectively.
Urban unemployment, particularly youth unemployment being growing areas of concern for the
government, recent survey program have been intended to cover only urban areas give that
unemployment is an urban than a rural phenomenon. Rural urban migration is considered to be
main contributing factor to urban population growth in Ethiopia. There is a widely shared view
that rural urban migration in Ethiopia increasing and in driven by the dwindling amount of farm
land available to the rural population and also by the low level of agricultural productivity. The
rural-urban migration has seasonal behavior and is considerate is considerable in different parts of
the country. The majority of the employed labor force is found is found in the agricultural sector
where earnings are low for the labor to come out of poverty.
A large size of the labor force is also engaged in the informal sector where underemployment, poor
corning, and lack of institutional protection are the characteristic features. These realities the
problem of working poor earnings than open unemployment.

9
According to CSA, s 2006 urban employment/unemployment survey; looking at the employed
population of the country is engaged in thee almost equally important major occupations; services
shop and market sales workers (25.5%), elementary occupation (22.1%). Professionals to gather
with technical and associate professionals make up about 10% of the employed population while
those persons working in legislator and senior officials took the smallest share constituting a mere
2.5% of the total employed urban population of the counter.
According to the same survey, looking at the distribution of urban employed population by
employment status of a person (at all-urban level). The bulk of employed population was
constituted by self- employed (42%) followed by those employed by government and public
enterprise (19%) and private organization (18%). As can be seen from the above figures, paid
employees altogether constituted about 45% of the total working population. Paid employees
consist of employees of government, public enterprise, private organization and non-governmental
organization (NGOS) and substantial share (10%). According to existing studies, more than 50%
of urban employment is accounted by the informal sector.
According to the informal sector survey (CSA<2002), the total number of persons in engaged
stood at 997,380 of which 799,353(80%) were operates and the remaining 98,027 (20%)
employees. Women dominate in both categories (operators and employees).the share of women in
the total number of persons engaged, operators and employees stood at 60%, 59% and 65%
respectively. As it stands now, informal sector is not well integrated with the formal (organized)
sector. A vertical and horizontal linkage does not seem to exist within the respective activities of
informal sector operator.
2.6. Empirical literature

The employment has pointed out (Todaro, 1994)in his economic development book that historical
the economics of western Europe and north America has often been described in terms of the
continues transfer of and north America has often been described in terms of the continues transfer
of economic activity and people from rural to urban area (Todaro, 1994). Both within and between
countries as urban industries expanded new employment opportunity was created and over the
same period, labor saving technological progress in agricultural reduced rural power needs.
The combination of the above two phenomena made it possible for western nation under a
systematic rural to urban transfer of their human resources. On the basis of western countries

10
experience many economics concluded that economic development in third world rapid urban
industrialization. Whereas when we come to the existing situation of third world countries the
figure is different from that of western countries.
According to O Higgins, 2001 globally the problem of youth unemployment is increasing
assuming higher proportions than the adults. Recently ILO estimate suggested that at least 60
million young people are without a job and that youth unemployment rates are on average three
times as high as adult rates (ILO, 1998) in countries of the organization for economic co-operation
and development (OCED) the unemployment rate of the figure for adults which 5.7% around 10
million young people are less figure are less widely available for developing countries. According
to the demographic and health survey (2000), two-third of women and 84% of men who live in
urban areas have been to school, while 41% of women and 84% of men who live in urban areas
have reached to secondary level of education. But for more than 80% of Ethiopia’s population that
live in rural areas of educational attainment is substantially lower, with 84% of women and 58%
of men have attained secondary level schooling in rural areas residents of the heavily urban area
of the country. Like Addis Ababa, Dire Dawa and the Harare region have higher level of
educational attainment especially at the secondary level or higher, Ndegua and powelson 1973 in
most developing countries the working age population has roughly doubles in the past 25 years. It
Will double again in the next 25 years, this growth clearly intensifies pressure on employment and
the amount of investment available per labor market entrants, worst of all in most of the less
developed countries (LDCs) 40 to 50% of the population is bracket is taken as is to 65 years, the
percentage of population in this category is considerably less in poor countries is considerably less
in poor countries this bottom heavy age structure of population result in higher ratio of dependent
to adult workers (Meier 1995), the implication is that those working must share their income with
those who don’t work and this leaves less for saving and accumulation.
Moreover, with high population growth, a good deal of the national income is spent on the
expansion of social serving.
2.6.1. Unemployment in Ethiopia

Generally, it is difficult to measure unemployment in LDCs (less developed countries), such as

Ethiopia because of the lack of reliable records and the existence of various informal type of work.
However, based on ministry of labor survey and numerous other analyses, a general assessment of

11
unemployment in Ethiopia can made. According to ministry of labor , the un employment rate
increased 11.5% annually during the 1978 -88 period , by 1987/88 there were 715,065 registered
unemployed workers in thirty –six major towns, of these registered , 134,117
Ultimately found jobs, heaving the remaining 580, 948 unemployed. The urban labor force totaled
1.7 million in 1988/89.yhe ministry of labor indicated that government employed 523,000 of these
workers. The rest relied on private employment or self- employment for their live hood; according
to government, rural unemployment was virtually nonexistent. A 1981/82 rural urban survey
revealed that 97.5% of rural labor force worked. 2.4% did not work because of social reasons, and
0.1% had been unemployed during the various twelve months. However, it is important to note
that unemployment, as conventionally define, records only part of the story; it leaves out disguised
unemployment and underemployments, which were prevalent in both urban and rural areas. Or
instances, the same rural labor force survey found that 50% of those working were unpaid family
workers. What is important about unemployment in Ethiopia is that with on expansion of the labor
force, the public sector with an already swollen payroll and acute budgetary problem was unlikely
to absorb more than a tiny fraction of those entering the labor market
(www.mongabay.com./history/ethiopia /Ethiopia unemployment.htm/).
The World Bank (2007) has prepared a comprehensive study in two volumes on the urban lobar
market situation in Ethiopia. Towards growth and job creation in the face of increasing poverty
and labor supply in urban Ethiopia. The World Bank (2007), with its report in two volumes,
acknowledges important improvement in urban employment between 1995 and 2005 though the
labor market situation remained unchanged. According to this study, the rapid rise in the urban
labor force creates pressure on the labor market and it can see as both a challenge and opportunity
for the Ethiopia government. The rising number of education labor force entering the market each
year as a result of education expansion and internal migration necessitate enhanced job creation in
the country. Another feature of the Ethiopia urban labor market indicated in this study is the
increasing literacy rate. This is implicated in the World Bank (2011) that the net primary school
enrollment rate in Ethiopia increased to 87.9 in 2010 from 68.5% in 2005. Law wages
characterized Ethiopia urban labor markets although it differs among the type of employers, sector
and workers characteristics. Even though females are relatively less skilled yet, the lit school
enrollment rate in Ethiopia increased to 87.9 in 2010 from 68.5% in 2005. Law wages
characterized Ethiopia urban labor markets although it differs among the type of employers, sector

12
and workers characteristics. Even though females are relatively less skilled yet, the literacy rate
and their participation in the labor force increasing. There is labor market segmentation with a
relatively wanted public sector and formal private sectors, and a large number of unemployed and
large information sector with low wages and mostly occupied by women. Women in urban
Ethiopia are relatively more affected by unemployment and they are paid lower wager (World
Bank, 2007).

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 CHAPTER THREE:

3. RESEARCH METHODOLOGY
This chapter highlights research design and methodology which incorporates the following
subtopic such as description of the study area, research design both quantitative and qualitative
approaches which includes sources of data, population, sample size, sampling techniques, data
collection instruments, and methods of data analysis. Finally, it discusses ethical considerations of
the study.

3.1. Description of Study Area

Maya City found in oromiya region its located at about 503 kilometers toward east of Addis
Ababa city, Ethiopia at 41°59′ 58″ latitude and 09°10′24″ longitudes with elevation 2000 m a.s.l.
The 2007 national census reported a total population for Maya City 50,986 from those 24,921 men
and 26,065 women. Maya City town is the center of trade. Moreover, it has strategic location for
chat trade and good climate condition that used to preserve chat production. According to Maya
City Healthy of Office, the population sizes of the Town were projected using annual growth rates
of 4.9 % for urban areas based on 2007 population & housing census. Accordingly, the population
sizes of the Town have increased from time to time. The population of Maya City increased from
43,393 in 2015 to 44,651in 2016 showing higher rate of urbanization (HTFEDO, 2024).

3.2. Research Design

As major objective of this research to assess and examine urban unemployment cause and
consequences, it is essential to plan and formulate research design. The research design for this
study is of cross-sectional study design is because of it is mostly used in social science study; it is
comparatively cheap to undertake and easy to analyze.
3.3.The Study Population
In this study the study population was consists of all urban unemployed society of Maya City. In
this study area there was 4782 urban unemployed. (Micro and small enterprise bureau).
3.4. Sampling Technique and Sampling size
The sampling size would determine through sample size determination formula for finite number
of the study population. This sampling technique would be done at Maya City. Way this technique
is selected is that because in this study area the number of the study population is large; so that the

14
study would be require determine sample size. In this study area there are 4782 study populations
among these populations. The researcher selects 45 as a sample size through use of
n =z2pq/e2= (1.96)2(0.03) (0.79)/0.0025=45
by considering the target population finite population formula for sampling size determination.
n=n/1+ (n-1)/N
n=45/1+ (45-1)/4782=45.0092

Were n=sample size without target population

N= target population
n=sample size with considering target population

3.5.Method of data collection

The researcher would use both primary and secondary data. Primary data would collect through
direct interview and using questioner’s method. Secondary data also would be collected from
unemployed societies by using necessarily book, magazines, journals and related material.
3.6.Data analysis
To analysis the data the researcher would be used simple statistical description such as mean media
and mode the data would be present through tabulation and percentage such as age, sex, mortal
status, education status, family size of the respondent. Etc.

3.7.Ethical Considerations
The research would do everything to make this work professional and ethical. To this end ,the
researcher will be tried to clearly inform to the respondents about the intention of the study i.e. is
purely for hypothetical purpose ,while introducing the purpose of the research in the introduction
part of the questionnaire the researcher confirmed that subjects ,confidentiality would be protecting
. Moreover, the study will be based on their permission .The researcher also will not personalize
any of the response of the respondents during data presentations, analysis and interpretation.
Furthermore all the materials will be used for this research will appropriately acknowledged. The
researcher will also notifying that their organization in the study is voluntary, that they have the
freedom to get information easily at any time

15
 4. WORK PLAN
Table 1. Work Plan

No Activities Year 2025

16
 June
may
Mar

Apr
Feb
Jan
1 Proposal development 

2 Proposal defense  

3 Data collection 

4 Data cleaning, coding and entering 

5 Data Analysis and write up 

6 Research writing 

7 First draft research s submission 

9 Thesis Presentation 

5. BUDGET BREAK DOWN

NO Items Measurement Quantity Unit cost Total cost

Paper Packet 0.5 2 200

Pen Piece 4 10 40

Flash Gigabyte(8GB) 1 200 200

Typing Page 45 5 225

 Printing Page 45 2 90

 Transport KM(2KM) 20 10¢%%‰¥% 200

 Bending Piece 2 20 40

 Internet MB 1000 0.1 100

 Mobile card Card 20 10 200

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 Sub total 1320

 Contingency 5% 66

 Grand total 1386

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 6. REFERENCES
Borgas G.j 2002. Labor Economics, Mc Graw-Hill international edition.

CSA, Ethiopia national labor survey, 2006

EEA, report on the Ethiopia economy volume V, 2005/06
Niall O, Higgins (2001), youth un employment and employment policy a global perspective:
Geneva.
Mankiw. N.G(2006), Macroeconomic, 5th ed. Network
Todaro (1999), Development economics, New York University and population country.
Smith, 1997; modern labor economics, theory and public policy 6th edition USA.
www.mongabay. Com / history / ethiopiaunemploment .htm.
www.ehow –com / info-8182767-4-types of unemployment .htm

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