Ethiopia’s Labour Market Shows Wide Gender and Employment Gaps
Ethiopia’s labour market remains marked by substantial gender, geographic, and structural disparities, with 44.2% of employment classified as informal and 53.9% as formal, according to the Ethiopian Statistical Service’s (ESS) National Integrated Household Survey on Labour Market Indicators (NIHS 2024/25).
The survey shows a sharp divide between urban and rural employment, significant regional differences in unemployment, continued dependence on agriculture and self-employment, and wide differences in average earnings between male and female paid employees.
Urban and Rural Employment Show a Sharp Divide
Formal employment dominates urban labour markets, accounting for 75.3% of urban employment, compared with 22.8% classified as informal.
The pattern is different in rural areas, where 53.2% of employment is informal and 44.9% is formal.
The formal-informal classification follows the 15th International Conference of Labour Statisticians (ICLS) framework. Certain activities, including subsistence farming and work performed in private households, are excluded from the classification. Consequently, the formal and informal shares do not add up to 100%.
Unemployment Varies Widely Across Regions
The national unemployment rate stands at 12.3%, but the survey records considerable regional differences.
Addis Ababa recorded the highest unemployment rate at 19.1%, followed by Dire Dawa at 14.5%, Tigray at 12.0% and Oromia at 10.5%.
The lowest rates were recorded in Benishangul-Gumuz at 4.1% and South West Ethiopia at 4.4%.
Low unemployment in predominantly rural areas should not necessarily be interpreted as stronger labour-market conditions. Rural economies have a much higher concentration of agricultural work, self-employment and unpaid family labour. People may therefore be counted as employed while working in low-productivity or subsistence activities.
Agriculture Remains the Largest Source of Employment
Agriculture continues to account for the largest share of Ethiopia’s employment.
The sector represented 69.4% of total employment in 2024/25, up from 64.9% in 2021. Agriculture’s share had fallen from 79.6% in 1999 to 64.9% in 2021 before increasing again in the latest survey.
Agriculture accounts for 81.7% of rural employment, highlighting its continuing importance to rural livelihoods.
Industry increased its share of employment from 5.2% in 2021 to 6.7% in 2024/25, while services accounted for 23.9% nationally.
Services are substantially more important in urban areas, where they account for 61.7% of employment.
| Sector | 1999 | 2021 | 2024/25 |
| Agriculture | 79.6% | 64.9% | 69.4% |
| Industry | — | 5.2% | 6.7% |
| Services | 15.0% | 29.9% | 23.9% |
The figures indicate that Ethiopia’s employment transition away from agriculture has not been linear. The expansion of services between 1999 and 2021 has been followed by a renewed increase in agriculture’s employment share.
Self-Employment Dominates the Labour Market
Self-employment accounts for 62.5% of employed Ethiopians, making it the largest employment-status category.
Paid employees represent 22.9%, while unpaid family workers account for 13.6%. The remaining share consists of categories including cooperative members, volunteers and unpaid trainees.
Private organizations are the largest institutional source of employment, accounting for 85.9% of national employment. Government institutions account for 6.7%, while NGOs and international organizations represent 5.1%.
| Employment status | Share |
| Self-employed | 62.5% |
| Paid employees | 22.9% |
| Unpaid family workers | 13.6% |
| Institutional sector | Share |
| Private organizations | 85.9% |
| Government institutions | 6.7% |
| NGOs and international organizations | 5.1% |
The dominance of self-employment is important when interpreting the national unemployment figure. Ethiopia’s labour market is not primarily structured around wage employment; most employed people work for themselves.
Women Face Significant Labour-Market Gaps
The survey records a substantial gender difference in economic inactivity.
Women account for 65.3% of the economically inactive population, compared with 34.7% for men.
Among paid employees, women earn an average monthly income of Birr 5,473, compared with Birr 7,534 for men.
The difference represents an estimated 27.4% gender wage gap, with women’s mean monthly earnings equivalent to about 72.6% of men’s.
The figure is a descriptive comparison of average earnings among paid employees and does not, by itself, establish the causes of the gap. Differences in occupation, industry, working hours, education, experience and other characteristics can contribute to differences in average earnings.
Occupational concentration is also pronounced. Skilled agricultural and fishery workers account for 63.3% of employment, followed by elementary occupations at 18.5%. Managers account for only 0.4%.
Youth Unemployment Remains Elevated
The national youth unemployment rate stands at 12.9%, above the overall unemployment rate.
The survey estimates Ethiopia’s total population at 111.0 million. The working-age population, defined in the survey as people aged 10 years and above, was approximately 80.1 million, equivalent to 72.1% of the total population.
The economically active labour force reached 54.3 million people, producing a labour-force participation rate of 67.8%.
The economically inactive population stood at 25.8 million, or 32.2% of the working-age population.
Urban Workers Record Longer Working Hours
Employed Ethiopians worked an average of 31.0 hours per week during the survey reference period.
Urban workers averaged 37.2 hours per week, compared with 29.3 hours among rural workers.
The difference reflects, in part, the contrasting structure of employment, with urban workers more concentrated in services and formal activities while rural employment remains closely tied to agriculture and household-based economic activity.
A Labour Market Defined by Structural Differences
The NIHS 2024/25 findings show that Ethiopia’s employment challenge extends beyond the headline unemployment rate.
Informal employment remains widespread, agriculture continues to absorb the majority of workers, and self-employment accounts for nearly two-thirds of employment. At the same time, the survey records significant differences in labour-market participation and earnings between men and women.
Geographical differences are equally pronounced. Addis Ababa’s unemployment rate of 19.1% contrasts sharply with the rates recorded in Benishangul-Gumuz and South West Ethiopia, while the urban-rural divide is reflected in both the formality of employment and average working hours.
Taken together, the figures show a labour market undergoing structural change but still heavily dependent on agriculture, self-employment and informal economic activity.
Source: Ethiopian Statistical Service (ESS), National Integrated Household Survey on Labour Market Indicators (NIHS 2024/25).