Decomposing Employment Growth in Selected sub-Saharan African Countries: The Roles of Structural Changes and Demographic Transition

Abstract

The challenge of employment growth in sub-Saharan Africa (SSA) countries goes beyond economic growth prospects to include structural and demographic dimensions. This study examines the relative contributions of structural changes and demographic factors to employment growth for a set of SSA countries using available annual data from 1970 to 2014. A decomposition approach is employed in the study using the Jobs Generation and Growth (JoGGs) method which generates results that show distributive components of employment, productivity and output changes over time in a system whereby the roles of economic structure and demographic changes could be observed. The study shows that the pattern of structural change in SSA countries has led to more low-productivity and vulnerable jobs generation. Rising shares of the traditional services sector in the economy has driven a large segment of employment into informal low-wage jobs. Major consequences of the nature of demographic changes in the SSA region are found to include decline in overall employment rate and large movement of the labour market towards less productive and low-wage employment. Social policies that address population and migration are therefore required to ensure that demographic factors do not further inhibit availability of productive employment in SSA.