Title: Informal sector and urban unemployment: small businesses contribution to large livelihood improvements

Authors: Tefera Darge Delbiso; Fekadu Nigussie Deresse; Addisalem Ambaye Tadesse; Befekadu Bezabih Kidane; Germán Guido Calfat

Addresses: Université catholique de Louvain (UCL), Clos Chapel-aux-Champs 30, Bte B1.30.15, 1200, Brussels, Belgium; Hawassa University, P.O. Box 05, Hawassa, Ethiopia ' Japan International Cooperation Agency (JICA), P.O. Box 5384, Addis Ababa, Ethiopia ' Japan International Cooperation Agency (JICA), P.O. Box 5384, Addis Ababa, Ethiopia ' AMREF Health Africa, P.O. Box 20855 Code 1000, Addis Ababa, Ethiopia ' University of Antwerp, Lange Sint-Annastraat 7, S.S.124, 2000 Antwerp, Belgium

Abstract: Based on quantitative data collected from 450 informal sector operators and in-depth interviews with stakeholders in Hawassa City, Ethiopia, this study assesses the improvement in the livelihood of informal sector operators. Our findings show that the majority of operators (about 90%) have improved their livelihood. Operators who are native, educated, experienced, profitable, and economical are more likely to improve their livelihood than their counterparts. However, operators face challenges such as a shortage of working capital, lack of working premises, shortage of raw materials, and narrow local market base. Given the considerable impact of the informal sector on the livelihood of the operators, the government needs to seriously consider the role of the informal sector in combating growing urban unemployment.

Keywords: informal sector; livelihood improvement; small business; urban unemployment; Ethiopia.

DOI: 10.1504/IJESB.2018.092025

International Journal of Entrepreneurship and Small Business, 2018 Vol.34 No.2, pp.169 - 182

Received: 06 Jun 2016
Accepted: 07 Aug 2016
Published online: 30 May 2018 *

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