IDEAS home Printed from https://ideas.repec.org/a/oup/jafrec/v32y2023i3p175-208..html

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

Author

Listed:
  • Emmanuel Mensah
  • Solomon Owusu
  • Neil Foster-McGregor
  • Adam Szirmai

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.

Suggested Citation

  • Emmanuel Mensah & Solomon Owusu & Neil Foster-McGregor & Adam Szirmai, 2023. "Structural Change, Productivity Growth and Labour Market Turbulence in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 32(3), pages 175-208.
    • Handle: RePEc:oup:jafrec:v:32:y:2023:i:3:p:175-208.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/jae/ejac010
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, IZA Network @ LISER.
    2. Jostein Hauge, 2019. "Should the African lion learn from the Asian tigers? A comparative-historical study of FDI-oriented industrial policy in Ethiopia, South Korea and Taiwan," Third World Quarterly, Taylor & Francis Journals, vol. 40(11), pages 2071-2091, November.
    3. Maroto-Sánchez, Andrés & Cuadrado-Roura, Juan R., 2009. "Is growth of services an obstacle to productivity growth? A comparative analysis," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 254-265, December.
    4. Joseph E. Stiglitz, 2018. "From manufacturing-led export growth to a twenty-first-century inclusive growth strategy: Explaining the demise of a successful growth model and what to do about it," WIDER Working Paper Series wp-2018-176, World Institute for Development Economic Research (UNU-WIDER).
    5. Timmer, Marcel P. & Szirmai, Adam, 2000. "Productivity growth in Asian manufacturing: the structural bonus hypothesis examined," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 371-392, December.
    6. Xinshen Diao & Margaret McMillan & Dani Rodrik, 2019. "The Recent Growth Boom in Developing Economies: A Structural-Change Perspective," Springer Books, in: Machiko Nissanke & José Antonio Ocampo (ed.), The Palgrave Handbook of Development Economics, chapter 9, pages 281-334, Springer.
    7. Jaan Masso & Raul Eamets & Kaia Philips, 2004. "Job creation and job destruction in Estonia: labour reallocation and structural changes," UCL SSEES Economics and Business working paper series 39, UCL School of Slavonic and East European Studies (SSEES).
    8. Xinshen Diao & Margaret McMillan & Samuel Wangwe, 2018. "Agricultural Labour Productivity and Industrialisation: Lessons for Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 27(1), pages 28-65.
    9. Ghani, Ejaz & O'Connell, Stephen D., 2014. "Can service be a growth escalator in low-income countries ?," Policy Research Working Paper Series 6971, The World Bank.
    10. Haltiwanger, John & Scarpetta, Stefano & Schweiger, Helena, 2014. "Cross country differences in job reallocation: The role of industry, firm size and regulations," Labour Economics, Elsevier, vol. 26(C), pages 11-25.
    11. Julián Messina & Giovanna Vallanti, 2007. "Job Flow Dynamics and Firing Restrictions: Evidence from Europe," Economic Journal, Royal Economic Society, vol. 117(521), pages 279-301, June.
    12. Diao, Xinshen & Kweka, Josaphat & McMillan, Margaret, 2018. "Small firms, structural change and labor productivity growth in Africa: Evidence from Tanzania," World Development, Elsevier, vol. 105(C), pages 400-415.
    13. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," The World Bank Economic Review, World Bank, vol. 13(2), pages 275-302, May.
    14. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calumn Hamilton & Emmanuel Mensah, 2026. "The Structural Change Emergency in South Africa," ERSA Working Paper Series 300, Economic Research Southern Africa.
    2. Abay, Kibrom A. & Wondale, Meseret & Korir, Josphat K. & Bachewe, Fantu Nisrane & Araya, Mesele & Breisinger, Clemens, 2025. "The landscape of youth engagement in labor markets in Africa: Are youth driving structural transformation?," IFPRI discussion papers 2382, International Food Policy Research Institute (IFPRI).
    3. Wang, Yafei & Zhao, Zihan & Liu, Jing & Bai, Ying & Tan, Zhixiong, 2024. "Mechanisms and effect assessment of smart city policy pilots on employment resilience: Empirical evidence based on 275 sample cities in China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 631-651.
    4. Gomado, Kwamivi Mawuli & Amedanou, Isaac, 2026. "Unemployment impact of network sectors and employment protection legislation reforms: Evidence from selected african countries," World Development, Elsevier, vol. 200(C).
    5. Woubet Kassa & Ndubuisi,Gideon & Owusu,Solomon, 2024. "Economic Transformation in Africa : The Role of North-South and South-South Trade," Policy Research Working Paper Series 10896, The World Bank.
    6. Solomon Owusu, 2025. "Global value chains and aggregate productivity growth in developing countries: the role of intra-sectoral allocation and structural change," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(1), pages 89-119, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mensah, Emmanuel & Owusu, Solomon & Foster-McGregor, Neil & Szirmai, Adam, 2018. "Structural change, productivity growth and labour market turbulence in Africa," MERIT Working Papers 2018-025, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Alessandro Nuvolari & Emanuele Russo, 2019. "Technical progress and structural change: a long-term view," LEM Papers Series 2019/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Owusu, Solomon & Szirmai, Adam & Foster-McGregor, Neil, 2020. "The rise of the service sector in the global economy," MERIT Working Papers 2020-056, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Hatem Jemmali & Fatma El-Hamidi, 2018. "Does it Still Pay to Go to College in Egypt? Decomposition Analysis of Wage Differentials For College and Non-College Graduates," Working Papers 1224, Economic Research Forum, revised 18 Sep 2018.
    5. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    6. Alistair Dieppe, 2021. "Global Productivity," World Bank Publications - Books, The World Bank Group, number 34015, April.
    7. Ilya B. Voskoboynikov, 2020. "Structural Change, Expanding Informality and Labor Productivity Growth in Russia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(2), pages 394-417, June.
    8. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    9. Lehmann, Hartmut & Pignatti, Norberto, 2018. "Informal employment relationships and the labor market: Is there segmentation in Ukraine?," Journal of Comparative Economics, Elsevier, vol. 46(3), pages 838-857.
    10. Lehmann, Hartmut & Muravyev, Alexander, 2012. "Labor Market Institutions and Informality in Transition and Latin American Countries," IZA Discussion Papers 7035, IZA Network @ LISER.
    11. Giuseppina Gianfreda & Giovanna Vallanti, 2020. "Labor Courts and Firing Costs: The Labor‐Market Effects of Trial Delays," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 40-84, January.
    12. Fabián Slonimczyk, 2022. "Informal employment in emerging and transition economies," World of Labour, LISER, pages 1-59, March.
    13. Aysit Tansel & Elif Öznur Acar, 2017. "Labor mobility across the formal/informal divide in Turkey: Evidence from individual-level data," Journal of Economic Studies, Emerald Group Publishing, vol. 44(4), pages 617-635, September.
    14. Peter Huber & Ulugbek Rahimov, 2017. "The Self-Selection of Workers to the Formal and Informal in Transition Economies: Evidence from Tajikistan," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 140-164, April.
    15. Rodrik, Dani, 2018. "New Technologies, Global Value Chains, and Developing Economies," CEPR Discussion Papers 13220, Centre for Economic Policy Research.
    16. Gimpelson, Vladimir & Kapeliushnikov, Rostislav, 2014. "Between Light and Shadow: Informality in the Russian Labour Market," IZA Discussion Papers 8279, IZA Network @ LISER.
    17. Bottasso, Anna & Conti, Maurizio & Sulis, Giovanni, 2017. "Firm dynamics and employment protection: Evidence from sectoral data," Labour Economics, Elsevier, vol. 48(C), pages 35-53.
    18. Leung, Woon Sau & Mazouz, Khelifa & Chen, Jie & Wood, Geoffrey, 2018. "Organization capital, labor market flexibility, and stock returns around the world," Journal of Banking & Finance, Elsevier, vol. 89(C), pages 150-168.
    19. Hartmut Lehmann, 2015. "Informal Employment in Transition Countries: Empirical Evidence and Research Challenges," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(1), pages 1-30, March.
    20. Kupets Olga, 2011. "Brain Gain or Brain Waste? The Performance of Return Labor Migrants in the Ukrainian Labor Market," EERC Working Paper Series 11/06e, EERC Research Network, Russia and CIS.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jafrec:v:32:y:2023:i:3:p:175-208.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/csaoxuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.