Using firm surveys for policy analysis in low income countries
Date
2008
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Publisher
Centre for the Study of African Economies, University of Oxford, Oxford, GB
Abstract
In this paper a range of issues are addressed as to how firm level surveys can inform policies to reduce poverty. In understanding how policy impacts on poverty it is necessary to understand the factors that determine the price and demand for labour of varying skills. Three factors matter. The productivity of the firm, its size and the skill composition of the workforce. Each of these factors is examined in this paper drawing on comparative evidence for manufacturing firms in Africa. An overview of the data that has been collected under firm surveys is provided. It is argued that understanding why firms are not creating nearly enough jobs for unskilled workers is the central current problem in development policy in Africa. Firm surveys show the nature of the policy dilemma. Small firms are good at producing jobs per unit of investment but the amount of investment is so low that such job creation is far below the rate of growth of the labour force. Further, as job creation is concentrated in self-employment and the small firm sector, such jobs are low paid relatively to those in the large scale and public sectors.
Description
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Working Paper
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Keywords
POVERTY ALLEVIATION, MANUFACTURING, UNSKILLED WORKERS, EMPLOYMENT CREATION, GROWTH RATE, MANPOWER, SELF EMPLOYED, EMPLOYMENT POLICY, LABOUR SUPPLY