Africa's Evolving Employment Structure

October 2, 2016 - Author: F. Kwame Yeboah and T.S. Jayne

IDWP 148. F. Kwame Yeboah and T.S. Jayne. 2016. Africa's Evolving Employment Structure

EXECUTIVE SUMMARY
Using nationally representative, multi-year survey data for nine African countries, this study
documents trends in the sectoral composition of Africa’s work force. The study highlights
differences in sectoral employment trends by age category, gender, and rural vs. urban areas.
By analyzing sectoral employment shifts over the past decade, we can gain insights about the
strength and robustness of economic transformation processes in much of Sub-Saharan
Africa.


While substantial differences across countries warrant caution against overgeneralization, the
last decade has witnessed a sharp increase in the rate at which Africans are exiting farming in
favor of off-farm activities. Today, farming accounts for 50 to 70% of the total number of
jobs recorded among Africa’s working-age population, down from 70 to 80% just 10 years
ago. These employment shifts signify that economic transformation is clearly underway in
much of the region. In some countries, however, the labor force is moving out of farming
very slowly. Countries experiencing the most rapid labor force exit out of farming over the
past decade tend to have achieved relatively strong agricultural productivity growth since
2000.


The share of the labor force in a given sector of the economy can be reported in terms of
survey respondents’ stated primary employment in a given year, the total numbers of jobs in
which a person has engaged (in recognition that many people have multiple jobs), or full-time
equivalents or FTEs, which weight the importance of various jobs that a person has according
to the share of their work time over the year. This study reports and compares labor force
trends using the latter two measures. Labor force trends are similar when examining
employment in terms of total number of jobs vs. full-time equivalents, but the share of the
work force in non-farm employment is considerably higher in all years and all countries using
the FTE measure. Within the off-farm sector, the greatest number of new jobs for youth is in
the non-farm informal sector, particularly in construction, commerce, and manufacturing.
Off-farm jobs in the agri-food system are also growing rapidly in percentage terms, but from
a low initial base. In terms of absolute numbers of jobs created, the off-farm segments of the
agri-food system are generating relatively few new jobs compared to farming and especially
the non-farm sectors. This finding underscores the policy and programmatic importance of
understanding which sectors are creating the greatest absolute numbers of new jobs, not just
which sectors are growing at the annual rate (which may involve relatively few new jobs if
starting from a low initial base). Farming will continue to be the single largest source of
employment in most countries at least for the next decade or more. Nevertheless,
employment patterns today in most African countries are substantially different and less
farm-centered than they were even only ten years ago.


Sectoral employment trends will also depend on the rate at which farm productivity grows in
the future. The rate of growth in farm productivity will influence the rate of employment
growth in the off-farm segments of the agri-food system and in the broader economy because
of the strong employment and income multiplier effects emanating from agriculture. For
these reasons, the role of agriculture in the national policy agenda of most African countries
remains fundamental. Because the rapid shifts in the work force over the past decade
occurred during an era of strong agricultural productivity growth influenced by high world
food prices, it is not clear whether these trends will continue at the same pace over the next
decade.

Shifts in employment trends among Africans in the 15-24 and 25-34 age range are
remarkably similar to those in the 35-64 age range. Unemployment and economic inactivity
among the working-age population is rising most rapidly among rural youth. Strategies that
effectively raise the returns to labor in farming will be among the most important steps that
African governments can take to improve youth livelihoods, especially for women.
Agricultural productivity growth, especially if broadly based, will generate strong multiplier
effects that expand job opportunities in the off-farm segments of the agri-food system as well
as in the broader non-farm economy. The particular policy levers to support agri-food system
growth are becoming more varied and complex as countries’ economic transformations
continue to unfold.

Tags: cross-country, idwp


Related Topic Areas

Cross-country


Authors

Thomas Jayne

Thomas Jayne
517-432-9802
jayne@msu.edu

Felix Kwame Yeboah

Felix Kwame Yeboah
517-355-0337
yeboahfe@msu.edu


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Food Security Group

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