Munich Personal RePEc Archive

An Analytical Theory of Labor Supply in Africa

Van, Germinal (2020): An Analytical Theory of Labor Supply in Africa.

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Abstract

The functioning of labor supply in Africa is substantially different from the one in developed countries. Most African economies remain heavily agricultural, which means that their economy is primarily based on the exportation and importation of commodities. However, an economy based on natural resources and the use of commodities generate a stagnated labor supply in the long run. Labor supply, however, expand more consistently in an economy that is based on human resources. This paper has two purposes. The first objective is to theoretically demonstrate how relying on natural resources as the primary basis of economic development could hamper the expansion of labor supply in an economy which is in the midst of structural transformation. The second objective is to substantiate that human resources as the primary basis of economic development, enable the expansion of labor supply whether it is in an open or a close economy.

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