Structural Change, Productivity Growth and Labour Market Turbulence in Sub-Saharan Africa

E. Mensah, S. Owusu, N. Foster-McGregor*, A. Szirmai

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

This paper presents a shift-share decomposition of the role of structural change in driving labour productivity in sub-Saharan Africa (SSA). The paper further examines the effect that the observed structural change has had upon the dynamics of labour markets in SSA. The analysis is based on a newly constructed dataset, the Extended Africa Sector Database. This database updates and extends the Africa Sector Database of the Groningen Growth and Development Centre. It includes eighteen countries covering the period 1960-2015. Overall, the database shows that productivity growth has been slow, with large and persistent sectoral productivity gaps present. The extent of structural change has been higher than that observed in previous studies, however. But while the share of employment and value added in agriculture has declined, resources have been pulled into certain service sectors that have relatively low productivity, thus limiting aggregate productivity improvements. The general direction of structural change has not been towards the most productive sectors. Results of the labour market analysis complement this analysis, providing suggestive evidence of a role for labour market institutional arrangements in many SSA countries in affecting these outcomes.
Original languageEnglish
Article numberejac010
Number of pages38
JournalJournal of African Economies
DOIs
Publication statusE-pub ahead of print - 23 May 2022

JEL classifications

  • o11 - Macroeconomic Analyses of Economic Development
  • o14 - "Industrialization; Manufacturing and Service Industries; Choice of Technology"
  • o41 - One, Two, and Multisector Growth Models
  • o43 - Institutions and Growth
  • o57 - Comparative Studies of Countries
  • j21 - Labor Force and Employment, Size, and Structure

Keywords

  • structural change
  • productivity growth
  • labour market turbulence
  • CROSS-COUNTRY DIFFERENCES
  • TRANSFORMATION
  • DYNAMICS
  • INDUSTRY

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