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Is Small Beautiful? Small Enterprise, Aid and Employment in Africa

Author

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  • Sam Jones
  • John Page
  • Abebe Shimeles
  • Finn Tarp
  • John Page
  • Måns Söderbom

Abstract

type="main" xml:lang="en"> Aid providers often describe small firms as ‘job creators’. But what types of jobs do they create? Drawing on enterprise survey data for nine African countries and panel data for Ethiopia we find that small and large formal sector firms create similar numbers of net jobs. Small firms, however, have much higher turnover of employment and pay persistently lower wages. To create more ‘good’ jobs aid should target the constraints to the growth of firms of all sizes. Improving the ‘investment climate’ and new programs to increase firms' capabilities—through, for example, management training—offer greater prospects for employment creation.

Suggested Citation

  • Sam Jones & John Page & Abebe Shimeles & Finn Tarp & John Page & Måns Söderbom, 2015. "Is Small Beautiful? Small Enterprise, Aid and Employment in Africa," African Development Review, African Development Bank, vol. 27(S1), pages 44-55, October.
  • Handle: RePEc:bla:afrdev:v:27:y:2015:i:s1:p:44-55
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