The Assessment of the Nature of Self-employment in Urban Ethiopia: The Case of Addis Ababa

Abstract

The major objective of this paper is to investigate the nature of selfemployment choice in Addis Ababa. More specifically, to identify determinants of self-employment activities that make difference in the income level of self employed, and assess the gender difference in self employment entry, and performance of self-employed. The researcher deployed descriptive research method. In which both primary and secondary data/information are used. The primary data is collected using structured questionnaires and 150 sample respondents were involved from six sub-cities of Addis Ababa. Findings from the empirical investigation undertaken revealed that self-employment is a route out of unemployment rather than being something of an entrepreneurial activity. The two major factors that motivate selfemployed respondents to start their business are government created conducive environment and personal interest to be self-employed. Selfemployed individuals responded as they are satisfied with their current job. However, the income that the self-employed people are generating is very small that can lead individuals to prefer paid work to selfemployment. The findings also revealed that the majority of selfemployed individuals came from low income earning community. This implies that they are facing problem of finance for their daily expenses. The nature of self-employment in terms of educational background of respondents indicates that most of the self-employed people are educated up to secondary and preparatory levels. Concerning gender, females` participation in self-employment activities is very limited. Three major recommendations are generated by this study that include:the usefulness of self-employment must be included in the curriculum of the country so that it would be easy for any individuals to start business and become self-employed; there should be polices that recognize and encourage self-employment and its role; and there is a need to design information systems that generate, document facts/data about self-employed population.