Addressing the employment-poverty nexus in Kenya: comparing cash-transfer and job-creation programmes

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Employment and poverty reduction in Kenya

Authors: E. Zepeda
Publisher: UNDP International Poverty Centre , 2007
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What is the link between employment and poverty reduction in Kenya? This paper examines unemployment, underemployment, employment and labour earnings, and the relationship of all these with poverty.

Based on an analysis of a Labour Force Survey, the author finds that:

* the single two most important factors decreasing the probability of being poor are having higher education and having access to a paid job in the modern sectors
* unemployment is high in and heavily affects urban areas, particularly young workers and mature educated workers
* underemployment is the main problem in rural areas, and it disproportionately affects women

* employment is dominated by traditional farming and pastoralists activities in rural areas and by informal activities in urban areas
* productive jobs are limited to wage employment, mostly in the modern public and private sectors concentrated in urban areas

The paper contends that poor workers need short-term social protection and all workers need a long-term employment-focused development strategy. Two programmes designed to provide income support to poor households are simulated; a child-transfer and a job-creation programme.

Results indicate that:

* child-transfer programmes perform better in rural areas, where dependency ratios are higher
* the job-creation programme markedly reduces poverty in urban areas, particularly among the extremely poor
* both programmes improve the incomes of the poor and result in significant reductions in the depth of poverty