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Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods

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  • Fox, Louise
  • Sohnesen , Thomas Pave

Abstract

Despite 40 percent of households relying on household enterprises (non-farm enterprises operated by a single individual or with the help of family members) as an income source, household enterprises are usually ignored in low-income Sub-Saharan-African development strategies. Yet analysis of eight countries shows that although the fast growing economies generated new private non-farm wage jobs at high rates, household enterprises generated most new jobs outside agriculture. Owing to the small size of the non-farm wage job sector, this trend is expected to continue for the foreseeable future. This analysis of enterprises and their owners shows that although it is a heterogeneous sector within countries, there are many similarities across countries, indicating that cross-country learning is possible. For labor force participants who want to use their skills and energy to create a non-farm income source for themselves and their families, household enterprises offer a good opportunity even if they remain small. The paper finds that given household human capital and location, household enterprise earnings have the same marginal effect on consumption as private wage and salary employment. The authors argue that household enterprises should be seen as part of an integrated job and development strategy.

Suggested Citation

  • Fox, Louise & Sohnesen , Thomas Pave, 2012. "Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods," Policy Research Working Paper Series 6184, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6184
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Louise Fox & Cleary Haines & Jorge Huerta Munoz & Alun H. Thomas, 2013. "Africa's Got Work to Do; Employment Prospects in the New Century," IMF Working Papers 13/201, International Monetary Fund.
    2. Jones, Sam & Tarp, Finn, 2013. "Jobs and Welfare in Mozambique," WIDER Working Paper Series 045, World Institute for Development Economic Research (UNU-WIDER).
    3. Louise Fox, 2015. "Are African Households Heterogeneous Agents?; Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers," IMF Working Papers 15/102, International Monetary Fund.
    4. Trapp Katharina, 2015. "Measuring the Labour Income Share of Developing Countries: Learning From Social Accounting Matrices," WIDER Working Paper Series 041, World Institute for Development Economic Research (UNU-WIDER).
    5. World Bank, "undated". "Africa's Pulse, April 2013 : An Analysis of Issues Shaping Africa's Economic Future," World Bank Other Operational Studies 20238, The World Bank.
    6. Ahmed, S. Amer & Vargas Da Cruz,Marcio Jose & Quillin,Bryce Ramsey & Schellekens,Philip, 2016. "Demographic change and development : a global typology," Policy Research Working Paper Series 7893, The World Bank.
    7. Nix, Emily & Gamberoni, Elisa & Heath, Rachel, 2014. "Bridging the gap : identifying what is holding self-employed women back in Ghana, Rwanda, Tanzania, the Republic of Congo, and Uganda," Policy Research Working Paper Series 6946, The World Bank.
    8. Aalia Cassim & Kezia Lilenstein & Morné Oosthuizen & Francois Steenkamp, 2016. "Informality and Inclusive Growth in Sub-Saharan Africa," Working Papers 201602, University of Cape Town, Development Policy Research Unit.
    9. Luc Christiaensen & Kaminski Jonathan, 2016. "Working Paper 229 - Structural change, economic growth and poverty reduction – Micro-evidence from Uganda," Working Paper Series 2322, African Development Bank.
    10. Golub, Stephen & Hayat, Faraz, 2014. "Employment, unemployment, and underemployment in Africa," WIDER Working Paper Series 014, World Institute for Development Economic Research (UNU-WIDER).
    11. Beegle,Kathleen G. & Benjamin,Nancy Claire & Recanatini,Francesca & Santini,Massimiliano, 2014. "Informal economy and the World Bank," Policy Research Working Paper Series 6888, The World Bank.
    12. Monga, Celestin, 2013. "The mechanics of job creation : seizing the new dividends of globalization," Policy Research Working Paper Series 6661, The World Bank.
    13. Alun H. Thomas, 2015. "Sub-Saharan Employment Developments; The Important Role of Household Enterprises with an Application to Rwanda," IMF Working Papers 15/185, International Monetary Fund.
    14. Theodore Ahlers & Hiroshi Kato & Harinder S. Kohli & Callisto Madavo & Anil Sood (ed.), 2014. "Africa 2050: Realizing the Continent's Full Potential," Books, Emerging Markets Forum, edition 1, number africa2050, July-Dece.
    15. Cho, Yoon Y. & Robalino, David A. & Romero, Jose M., 2015. "Entering and Leaving Self-Employment: A Panel Data Analysis for 12 Developing Countries," IZA Discussion Papers 9358, Institute for the Study of Labor (IZA).
    16. Dou, Xiaoya & Gray, Clark & Mueller, Valerie & Sheriff, Glen, 2016. "Labor adaptation to climate variability in Eastern Africa:," IFPRI discussion papers 1537, International Food Policy Research Institute (IFPRI).
    17. repec:wbk:wbpubs:28971 is not listed on IDEAS

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    Keywords

    Labor Markets; Banks&Banking Reform; Population Policies; Labor Policies; Rural Poverty Reduction;

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