IJSRP, Volume 11, Issue 1, January 2021 Edition [ISSN 2250-3153]
Unemployment is a major challenge for policymakers in both developing and advanced countries, as it can lead to a negative impact on economic welfare, misery and social unrest. Structural change generates deals with reallocation resources on agriculture, manufacturing, and services esteemed in reducing unemployment rate. The aim of this study was to examine the effect of changes in employment and income on unemployment across this sectors. Success of structural transformation is measured by the contributions of agriculture, manufacturing, and the service sector to growth and reduction of unemployment problem in Kenya. Data from World Bank ranging from 2000 to 2020 was used to research the changing impacts of economic complexity an indicator of structural transformation on unemployment. The long run study findings indicated that: changes in value addition a proxy for income changes has a positive effect on unemployment in the long run sectorial employment in the short run has a positive and significant impact on the level of unemployment. These will inform policy makers by designing policy recommendation that will foster structural transformation aimed at reducing unemployment in Kenya.