Tradable Jobs and Local Labour Market in sub-Saharan Africa

Charpe, Matthieu (2022): Tradable Jobs and Local Labour Market in sub-Saharan Africa.

Abstract

This paper measures the impact of attracting tradable jobs on nontradable jobs at the local level in sub-Saharan countries. Applying the local multiplier approach to 10 medium and low-income countries disaggregated into 1441 administrative entities, we show that the multipliers are 3 to 5 times larger than in high-income countries. The multipliers also increase with the employment status and the skills of the tradable jobs created, highlighting the importance of the consumption of locally produced goods. This points to the importance of manufacturing for economic development and structural transformation. The paper also suggests a modification of the usual shift-share instrumental variable in countries characterized by sectoral diversification/unconditional convergence. Lastly, we show that the multipliers maybe be impacted by the size of administrative entities.

• Item Type: MPRA Paper
• Language: English
• Keywords: Local multiplier, tradable, nontradable, local labour market, structural transformation
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J4 - Particular Labor Markets > J46 - Informal Labor Markets; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R22 - Other Demand

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