Leveraging Youth Employment in the Tanzania Tourism Sector: The Role of MSMEs

Despite the employment potential of Tanzania’s tourism sector, the sector is not absorbing the youth sufficiently, who remain unemployed after graduating from various institutions. This study examines the extent of youth employment in the sector and factors associated with their increased employment. Using cross-sectional data from 445 micro, small and medium enterprises (MSMEs) collected between September and November 2018, the study reveals that the youth form the largest proportion of wage employees. Furthermore, using econometric techniques, the study finds that factors influencing enterprises to employ more youths include duration of business operation, formal access to capital, provision of employment contracts, non-networking recruitment channels and number of customers. Hence, the potential of MSMEs to employ more youths depends internally on reliable access to capital and adherence to best employment practices, such as providing employment contracts and ensuring equal opportunity to applicants. Both the survival of MSMEs and increased youth employment depend externally on attracting more tourists. JEL Classifications: M51, J21, E24