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The Changing Structure of Africa’s Economies

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  • Xinshen Diao
  • Kenneth Harttgen
  • Margaret McMillan

Abstract

Using data from the Groningen Growth and Development Center’s Africa Sector Database and the Demographic and Health Surveys, we show that much of Africa’s recent growth and poverty reduction has been associated with a substantive decline in the share of the labor force engaged in agriculture. This decline is most pronounced for rural females over the age of 25 who have a primary education; it has been accompanied by a systematic increase in the productivity of the labor force, as it has moved from low productivity agriculture to higher productivity services and manufacturing. We also show that, although the employment share in manufacturing is not expanding rapidly, in most of the low-income African countries the employment share in manufacturing has not peaked and is still expanding, albeit from very low levels. More work is needed to understand the implications of these shifts in employment shares for future growth and development in Africa south of the Sahara.

Suggested Citation

  • Xinshen Diao & Kenneth Harttgen & Margaret McMillan, 2017. "The Changing Structure of Africa’s Economies," The World Bank Economic Review, World Bank, vol. 31(2), pages 412-433.
    • Handle: RePEc:oup:wbecrv:v:31:y:2017:i:2:p:412-433.
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    File URL: http://hdl.handle.net/10.1093/wber/lhw070
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    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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