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Youth Unemployment and Earnings in Africa: Evidence from Tanzanian Retrospective Data

Author

Listed:
  • Sarah Bridges
  • Louise Fox
  • Alessio Gaggero
  • Trudy Owenstrudy

Abstract

We exploit a unique data set of individual labour market histories in urban Tanzania to estimate the effect of early labour market experiences on adult labour market outcomes. We consider four labour market entry states—wage employment, self-employment, unpaid worker in the family business and unemployed job-seeker—and estimate how final earnings are associated with each entry state. The findings suggest that how individuals enter the labour market does matter for final earnings. We find that an initial period spent in wage employment is associated with an important earnings premium. We interpret this finding as evidence of the entrapment hypothesis, in that, people who enter the labour market in more disadvantaged positions, such as in the household enterprise, either as self-employed or as unpaid family workers, suffer a penalty in their future earnings. These findings persist after controlling for family specific fixed effects.

Suggested Citation

  • Sarah Bridges & Louise Fox & Alessio Gaggero & Trudy Owenstrudy, 2017. "Youth Unemployment and Earnings in Africa: Evidence from Tanzanian Retrospective Data," Journal of African Economies, Centre for the Study of African Economies, vol. 26(2), pages 119-139.
    • Handle: RePEc:oup:jafrec:v:26:y:2017:i:2:p:119-139.
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    File URL: http://hdl.handle.net/10.1093/jae/ejw020
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    More about this item

    Keywords

    labour market entry; youth unemployment; wage equation;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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