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Labor productivity and employment gaps in Sub-Saharan Africa

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ABSTRACT

Drawing on a new set of nationally representative, internationally comparable household surveys, this paper provides an overview of key features of structural transformation – labor allocation and labor productivity – in four African economies. New, micro-based measures of sector labor allocation and cross-sector productivity differentials describe the incentives households face when allocating their labor. These measures are similar to national accounts-based measures that are typically used to characterize structural change. However, because agricultural workers supply far fewer hours of labor per year than do workers in other sectors in all of the countries analyzed, productivity gaps shrink by half, on average, when expressed on a per-hour basis. Underlying the productivity gaps that are prominently reflected in national accounts data are large employment gaps, which call into question the productivity gains that laborers can achieve through structural transformation. Furthermore, agriculture’s continued relevance to structural change in Sub-Saharan Africa is highlighted by the strong linkages observed between rural non-farm activities and primary agricultural production.

No MeSH data available.


Consumption gaps by sector. Figure (a) (top) shows the ratio between consumption based on expenditures per working household member per year between households primarily participating in agriculture and those primarily participating in industry, services and ”unknown” sectors, respectively. Figure (b) (bottom) shows the ratio between consumption per hour of labor supplied by the household for households primarily participating in agriculture vs. in other sectors.
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f0045: Consumption gaps by sector. Figure (a) (top) shows the ratio between consumption based on expenditures per working household member per year between households primarily participating in agriculture and those primarily participating in industry, services and ”unknown” sectors, respectively. Figure (b) (bottom) shows the ratio between consumption per hour of labor supplied by the household for households primarily participating in agriculture vs. in other sectors.

Mentions: The consumption gap estimates are a ratio in annual per-worker consumption between households participating primarily in agriculture and those participating primarily in industry and services, respectively (Fig.9a). I also create an analogous per-hour measure, which is based on consumption per hour of labor supplied by households, including labor supply to secondary sectors. Households are classified by their primary sector of participation. The per-hour measures are shown in Fig.9b. These consumption gaps are fairly similar across countries, and are quite similar in magnitude to per-person-per-year productivity gaps. Households primarily in the industry sector consume 2–3 times more per capita per year than agricultural households. Households primarily in the services sector consume 2–4 times more per capita per year than agricultural households. As with productivity gaps, consumption gaps also disappear almost entirely when they are expressed per hour of labor supplied by each household. This suggests that differences in consumption across sectors (as with differences in returns to sector participation) can be explained in large part by differences in hours worked across sectors.


Labor productivity and employment gaps in Sub-Saharan Africa
Consumption gaps by sector. Figure (a) (top) shows the ratio between consumption based on expenditures per working household member per year between households primarily participating in agriculture and those primarily participating in industry, services and ”unknown” sectors, respectively. Figure (b) (bottom) shows the ratio between consumption per hour of labor supplied by the household for households primarily participating in agriculture vs. in other sectors.
© Copyright Policy - CC BY
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC5384442&req=5

f0045: Consumption gaps by sector. Figure (a) (top) shows the ratio between consumption based on expenditures per working household member per year between households primarily participating in agriculture and those primarily participating in industry, services and ”unknown” sectors, respectively. Figure (b) (bottom) shows the ratio between consumption per hour of labor supplied by the household for households primarily participating in agriculture vs. in other sectors.
Mentions: The consumption gap estimates are a ratio in annual per-worker consumption between households participating primarily in agriculture and those participating primarily in industry and services, respectively (Fig.9a). I also create an analogous per-hour measure, which is based on consumption per hour of labor supplied by households, including labor supply to secondary sectors. Households are classified by their primary sector of participation. The per-hour measures are shown in Fig.9b. These consumption gaps are fairly similar across countries, and are quite similar in magnitude to per-person-per-year productivity gaps. Households primarily in the industry sector consume 2–3 times more per capita per year than agricultural households. Households primarily in the services sector consume 2–4 times more per capita per year than agricultural households. As with productivity gaps, consumption gaps also disappear almost entirely when they are expressed per hour of labor supplied by each household. This suggests that differences in consumption across sectors (as with differences in returns to sector participation) can be explained in large part by differences in hours worked across sectors.

View Article: PubMed Central - PubMed

ABSTRACT

Drawing on a new set of nationally representative, internationally comparable household surveys, this paper provides an overview of key features of structural transformation – labor allocation and labor productivity – in four African economies. New, micro-based measures of sector labor allocation and cross-sector productivity differentials describe the incentives households face when allocating their labor. These measures are similar to national accounts-based measures that are typically used to characterize structural change. However, because agricultural workers supply far fewer hours of labor per year than do workers in other sectors in all of the countries analyzed, productivity gaps shrink by half, on average, when expressed on a per-hour basis. Underlying the productivity gaps that are prominently reflected in national accounts data are large employment gaps, which call into question the productivity gains that laborers can achieve through structural transformation. Furthermore, agriculture’s continued relevance to structural change in Sub-Saharan Africa is highlighted by the strong linkages observed between rural non-farm activities and primary agricultural production.

No MeSH data available.