Dynamics and determinants of total labor productivity in Sub-Saharan Africa
DOI:
https://doi.org/10.18559/rielf.2024.1.1632Keywords:
labor productivity, structural change, employmentAbstract
Purpose : The aim of this paper is to analyze the dynamics of total labor productivity by examining its determinants in Sub-Saharan Africa.
Design/methodology/approach : This paper exploits the total labor decomposition method and a structural VECM model on panel data for 40 SSA countries covering the period 1995 - 2019.
Findings : The results indicate that structural changes contributed favorably (39.54%) to total labor productivity growth in SSA, while intra-sectoral productivity slowed the latter's growth (-48.12%). Sectoral analysis reveals a negative contribution from agriculture, a positive one from manufacturing and a negative one from intra-sectoral productivity (-40.9%) in the service sector, which contributed 55.5% to structural change. Furthermore, the results of the VECM model show that the gross secondary school enrolment rate, information and communication technologies, political stability and control of corruption significantly favor total labor productivity in SSA.
Originality/value : These results imply that it is necessary for African countries to reorient their labor force towards the manufacturing sector and especially the high-productivity service sector, in order to capture the surplus labor coming from agriculture.
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