Modeling the determinants of youth unemployment in East Africa: a comparative study

Abstract

Youth unemployment remains a critical challenge in East Africa, particularly in Kenya, Tanzania, Uganda, and Rwanda, due to structural economic constraints, education-employment mismatches, and insufficient job creation. This study employed a 33-year longitudinal econometric analysis using data from national agencies, the ILO, and the World Bank to model the key determinants of youth unemployment. A multiple regression model revealed that foreign direct investment inflows, foreign direct investment outflows, and government expenditure on education significantly impacted youth unemployment, while GDP growth and inflation showed no significant effect. Diagnostic tests confirmed the model's reliability, with an R2 value of 0.445, indicating that 45% of the variation in youth unemployment could be explained by the selected factors. The findings highlighted the need for investment-driven job creation, vocational training, and stronger public private partnerships to align education with labor market demands. Policymakers ought to scale up youth employment initiatives, enhance regional economic integration, and improve access to financing for startups, fostering long-term employment solutions in the region.