Labor Market Demand Analysis of Technical Vocational Training (TVT) Graduates: Manufacturing Sector in Focus

Abstract

Labor demand analysis is a fundamental foundation for workforce planning, economic policy formation, and sustainable development. The primary goal of this study is to analyze the labor market demand for Technical and Vocational Education and Training (TVET) graduates in Ethiopia's manufacturing sector by identifying important factors that affect labor demand, evaluating their effects, and estimating how labor demand changes over time.

This study employed an explanatory research design with a mixed research approach. It relied primarily on secondary data, including twenty-five years (1988 to 2012 EC) of manufacturing survey data from the Ethiopian Statistics Service (ESS), as well as interviews with 31 respondents. A purposive sampling approach was used to select respondents for the interviews. Descriptive, inferential, and thematic analyses were employed to analyze the data. Standard deviation, mean, and percentage were used in descriptive analyses. In addition, Quantile regression, ordinary least squares (OLS), and ARIMA were utilized to explore the factors influencing labor demand and to estimate labor demand over the next five years. The study's key findings were that labor demand was positively correlated with working capital, wages, sales, bank payments (loan payments), and raw material costs. The ranking of labor demand across industries from textile and leather, non-metallic minerals, food and beverage processing, chemicals, pharmaceuticals and personal care, wood and printing, basic metals, to automotive and transport equipment was also identified. Furthermore, labor demand in the manufacturing sector is predicted to decrease over the next five years.