The impact of social enterprise on labor market structure: A case study of social enterprises in Nairobi

Abstract

Social entrepreneurship has spread worldwide, as social entrepreneurs seek the solutions to developmental challenges. This is especially true in Nairobi, Kenya, as social entrepreneurship has established itself in the labor market. However, there is limited knowledge regarding the impact of social enterprises in African countries, especially with regards to the labor market. It is for this reason that this study aims at highlighting the impact of social enterprises on the labor market in Nairobi, Kenya. It also provides an outline of the labor market structure in Nairobi. The study employed a mixed methods approach, using both qualitative and quantitative approaches, collected concurrently as part of a concurrent triangulation design. Five social enterprises located in Nairobi were involved in the study, and were chosen through snowball sampling. These social enterprises offered direct employment, training programmes or support for beneficiaries to start their own businesses. The research instruments used in this study were as follows; 10 interviews (5 interviews with beneficiaries and 5 with social entrepreneurs), 50 questionnaires distributed to beneficiaries through random sampling, field work observations and a literature review. The results of this study were that social enterprises in Nairobi have a significant impact on the livelihoods of beneficiaries by directly employing them, providing necessary skills for later employment or supporting them to start their own businesses. However, these increases in income are often either inadequate or inconsistent as most beneficiaries are forced to diversify their livelihoods. Social enterprises also fail to reduce the gender wage gap among their beneficiaries. Social enterprises also increase market access among their beneficiaries by providing them with advice and training, as well as, direct access to customers. In the same vein, they increase the level of training of beneficiaries. This helps beneficiaries improve their relations with customers, produce high quality goods, hone their skills, gain employment, gain experience, build a repertoire, earn profits and start businesses. The subject of training also affects the income levels of beneficiaries, as many of those who study entrepreneurship, quality training and customer service earn above minimum wage.