William Baah-Boateng

Determinants of Unemployment in Ghana

Unemployment is often cited as a measure of the low employment content of Ghanas strong growth performance over the past three decades. The paper presents evidence to suggest that employment growth in Ghana continues to trail economic growth due to high growth of low employment generating sectors against sluggish growth of high labour absorption sectors. A cross-sectional estimation of a probit regression model also indicates a strong effect of demand factors on unemployment, indicating a weak employment generating impact of economic growth. Empirical analysis also confirms higher vulnerability of youth and urban dwellers to unemployment with education and gender explaining unemployment in some instances. Reservation wage is also observed to have an increasing effect of unemployment. The paper recommends policies that promote investment in agriculture and manufacturing which is associated with higher employment elasticity of output. High incidence of unemployment among the youth and secondary school leavers in the most recent period requires targeted intervention including support for entrepreneurial training and start-up capital to attract young school leavers to become ‘creators’ rather than ‘seekers’ of jobs. A downward review of expectations on the part of jobseekers in terms of their reservation wage could help reduce unemployment in Ghana.

Unemployment in Africa

Purpose - – The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African countries including Ghana. This phenomenon tends to put many jobless adults into the discouraged worker category thereby giving a misleading picture about the unemployment situation in these countries. In addition, the structure of the labour market in many African countries is such that informality takes the face of unemployment. Design/methodology/approach - – The paper uses a scatter plot and simple correlation analysis to show a trade-off between informality or vulnerability of employment and unemployment rates in Africa. The paper also adopts descriptive approach based on simple diagrams to show the extent of discouraged worker effect on the phenomenon of unemployment. Findings - – The paper finds a significantly negative correlation between unemployment and informality in Africa. Beside the high level of informality that hides the face of unemployment, the exclusion of many discouraged workers in estimating unemployment underrates the seriousness of the phenomenon. The paper therefore recommends the adoption of a broader definition of unemployment that accounts for discourage workers and underemployment to show the true picture of labour market challenge in Africa. Additionally, targeted programmes to support and transform the informal sector is required to make it a more attractive means of employment rather than being seen as a refuge point for the unemployed in Africa. Originality/value - – The observation that unemployment should be looked at from a broader perspective that accounts for discourage workers to inform policy design forms a base of the paper’s contribution to the body of literature. In addition, the high level of informality that hides the problem of unemployment shows that labour market challenges should not be restricted to unemployment but low quality of employment that characterises informality as well.

Unemployment in Ghana: a cross sectional analysis from demand and supply perspectives

Purpose - – The purpose of this paper is to analyse the causes of unemployment in Ghana from both labour demand and supply perspectives based on most recent cross sectional data set from one nationally representative household survey and a baseline survey for Millennium Development Support. Design/methodology/approach - – A logit regression estimation technique is applied to two different household survey data sets of 2008 and 2013 to capture the effect of labour demand and supply on unemployment. Findings - – Using education and age as capability variables to represent supply factors, unemployment is found to increase with education, and declines with age, confirming higher unemployment rate among the youth, than the old. The paper also observes strong influence of demand factors on unemployment based on relatively higher incidence of unemployment fulltime jobseekers relative to part-time jobseekers and seekers of formal or wage-employment and self-employment or SMEs compared with those seeking any job. Other factors such as the individual’s reservation wage, marital status, sex and poverty status as well as their rural-urban location are also found to cause unemployment in Ghana. Practical implications - – Unemployment as a result of the inability of individuals to obtain a job of their choice in the midst of strong economic growth in Ghana suggests weak employment content of growth. In contrast, an increasing phenomenon of unemployment with education also reflects a problem of skill mismatch between skills churn out by education and training institutions and skills requirement by firms in the labour market. Originality/value - – The originality of the paper and its contribution to existing literature largely emanate from the inclusion of demand factors in a cross sectional analysis of causes of unemployment.

The youth unemployment challenge in Africa: What are the drivers?

Youth unemployment remains a major political and socioeconomic challenge in Africa despite the recent strong growth performance of many African countries. The study undertakes an empirical assessment of the main sources of youth unemployment in Africa. Based on panel data of 41 African countries covering the period 2000–2010, the study finds a demographic youth bulge and poor economic growth from both supply and demand sides of the market to be key drivers of youth unemployment in Africa. Employment-to-population ratio as a measure of country’s job creation ability and vulnerable employment as a proxy for informality are observed to have had a decreasing effect on youth unemployment. The empirical findings also suggest higher youth employment rates among females than males and a higher concentration in urban than rural areas. Investment in the high labour absorption sectors of agriculture and manufacturing is advocated as job creation strategies, along with population control measures to slow the growing youth population in Africa. High growth in the low employment sectors of mining and extractive industries could serve as resource generating avenues to promote investment in education and skill training, along with infrastructure to facilitate growth in high labour absorption sectors.

Assets and shocks: a gendered analysis of Ecuador, Ghana and Karnataka, India

ABSTRACT Drawing upon household surveys in Ecuador, Ghana and Karnataka, India, we analyse the relationship between assets and shocks, distinguishing between asset loss as the shock, and the use of assets as a coping strategy. A greater proportion of households experienced a direct loss of assets due to shocks than as a coping response. In Karnataka, but not in Ghana or Ecuador, women’s assets are more likely to be sold than men’s. Asset ownership and the decision to sell or pawn assets are fairly strongly related but do not completely overlap. Husbands and wives often differ in both the perception of shocks and the response to them.

Determinants of Job Search Intensity in Ghana

The success of individuals in securing employment requires a significant search effort. This article presents an empirical analysis of the determinants of job search intensity among a cross-section of workers in Accra, Ghana. Based on a sample of 404 workers drawn from 100 formal sector firms in Accra, we adopt the Poisson regression estimation technique to indicate that age, years of schooling, labour market experience, sex of household head, firm size and ethnic group significantly influence job search intensity. Measures to expose young job seekers to the world of work via internship and apprenticeship could accelerate their transition to employment. JEL Classification: J6; J21; J23

Empirical analysis of the changing pattern of sex segregation of occupation in Ghana

Purpose - – The purpose of this paper is to assess the changing pattern and direction of sex segregation of occupation as a measure of unbalanced distribution of occupation by sex in Ghana between 1960 and 2010, identify the sources of the changes and show whether female-male earnings difference has changed in line with the changes in occupational segregation. Design/methodology/approach - – The paper applies two segregation indices to data from population censuses and household surveys in the empirical analysis Findings - – The outcome of the segregation measure indicates a generally modest to high but declining occupational sex segregation in Ghana over a period of five decades. Sex composition and occupational mix effects are found to be the underlying drivers of the declining segregation with the former coming up strongly during the initial 40 years. This has, however, not translated into narrowing female-male earnings gap. Practical implications - – The paper recommends measures towards economic transformation for a change in occupational structure backed by implementation of education policy to enhance female access to male-dominated science and engineering programmes and employment in high-skill occupations. Originality/value - – The strength of the paper is seen from its originality as it is the first attempt to assess changing pattern of occupational segregation over a long period of five decades with consistent and comparable data sources.

Effect of education on migration decisions in Ghana: a rural-urban perspective

Purpose - – The purpose of this paper is to investigate the effect of education on migration decisions focusing on rural and urban in-migrants by comparing the 2005/2006 and 2012/2013 rounds of the Ghana Living Standards Survey (GLSS5 and GLSS6). After correcting for selectivity bias, the authors observed that anticipated welfare gain and socio-economic variables such as sector of employment, sex, experience, age, educational level and marital status significantly affect an individual’s migration decision. Design/methodology/approach - – The authors made use of Sjaastad’s (1962) human capital framework as a basis for examining the impact of education on migration. The migration decision equation was based on the Heckman two stage procedure. Findings - – While educational attainment is observed to have a positive effect on migration decision in the period 2005/2006, the authors find a negative effect of educational attainment on migration decision in the period 2012/2013. The effect of educational attainment on migration decision in 2005/2006 for urban in-migrant is higher than the effect for rural in-migrant, with its significance varying for the different stages of educational attainment. In absolute terms, whereas the effect of secondary educational attainment on migration decisions for urban in-migrant is higher than that of rural in-migrant, the reverse holds for higher educational attainment during the period 2012/2013. Social implications - – Based on the mixed effect of education on migration decision as evident from the study, policies to enhance the educational system in Ghana should be complemented with job creations in the entire country. Moreover, special attention should be given to the rural sector in such a way that the jobs to be created in the sector do not require skilled workers. With quality education and job creation, the welfare of individuals living in urban and rural areas will be enhanced. Originality/value - – In spite of the importance of education in migration decisions, there is scanty literature on the rural-urban dimension. To the best of the author’s knowledge there is no literature in the Ghanaian context which examines the rural and urban perspective of the impact of education on migration with a much recent data. Further, the author consider how the determinants of migration decision have changed over time focusing on rural and urban perspectives.

The Study and Practice of Economics in Ghana

Against the backdrop of developments in the Ghanaian economy and the evolution of economics as a discipline, this chapter traces the evolution of the study and practice of economics in Ghana. The major thematic areas are the teaching of economics at the University of Ghana, economic research in Ghana, and economic policy-making. Under the theme of the teaching of economics at the University of Ghana, the chapter assesses the changes in the programmes of the Department of Economics, what motivated the changes, and the challenges of teaching economics in Ghana. Regarding economic research, we focus on the patterns, trends, and underlying factors. We also highlight constraints to economic research in Ghana, as well as the enhanced opportunities. The third thematic area examines the relationship between researchers in economics and policy-makers. This is done by examining the available institutional framework for facilitating such a relationship and the relevance of economic research to policy-makers.

Human Capital as a Vehicle for Africa’s Economic Transformation

The paper attempts to rekindle the debate of low human capital base as a bane of Africa’s economic transformation. The paper attributes developmental gap between Africa and the rest of the world to its relatively weak human capital base. Low public investment in education culminating in limited access to education, poorly motivated teachers and overstretched tools and facilities remain key challenges to Africa’s human capital development. Africa’s human capital base can be enhanced through improved public investment in education and private sector participation in provision of education, measures to reverse brain drain, and effective collaboration between educational institutions and industry.