Generally, it is difficult to measure unemployment in less developed countries such as Ethiopia because of the lack of reliable records and the existence of various informal types of work. However, based on Ministry of Labor surveys and numerous other analyses, a general assessment of unemployment in Ethiopia can be made. According to the Ministry of Labor, the unemployment rate increased 11.5 percent annually during the 1979-88 period by l987/88 there were 715,065 registered unemployed workers in thirty-six major towns. Of those registered, l34,ll7 ultimately found jobs, leaving the remaining 580,948 unemployed. The urban labor force totaled 1.7 million in 1988/89. The Ministry of Labor indicated that the government employed 523,000 of these workers. The rest relied on private employment or self-employment for their livelihood.

According to the government, rural unemployment was virtually nonexistent. A l981/82 rural labor survey revealed that 97.5 percent of the rural labor force worked, 2.4 percent did not work because of social reasons, and 0.l percent had been unemployed during the previous twelve months. However, it is important to note that unemployment, as conventionally defined, records only part of the story it leaves out disguised unemployment and underemployment, which were prevalent in both urban and rural areas. For instance, the same rural labor force survey found that 50 percent of those working were unpaid family workers. What is important about unemployment in Ethiopia is that with an expansion of the labor force, the public sector--with an already swollen payroll and acute budgetary problems--was unlikely to absorb more than a tiny fraction of those entering the labor market.

Data as of 1991