Foto AERC

Growth Sectors for Youth Employment (GSYE) is an African Economic Research Consortium (AERC), Overseas Development Institute (ODI), Economic Research Forum (ERF) and INCLUDE collaborative research that seeks to provide research evidence on economic sectors that have the potential to significantly create employment for youth. The project objectives are to

  1. identify promising economic sectors or value chains for job creation for young men and women in selected countries in Africa
  2. identify the country specific conditions needed for local and foreign private sector to invest in these sectors or value chains
  3. identify the country specific actors that are needed to create conditions that enhance or reduce investment security
  4. identify ways to promote equal access and opportunity for youth to these new sources of work and income, addressing inequality related to gender, socio-economic background and place of residence.

The project is carried out in several phases. The first phase involved the drafting of framework papers. The purpose of framework papers was to help draw some general characteristics on decent employment for Africa’s youth. Another phase is drafting of country case studies (Egypt, Ethiopia, Kenya, Mali, Nigeria, Senegal, Tunisia and Uganda). Country case studies will help in the identification and explanation of nuances and peculiarities of these countries. During the mid-review and the final-review workshops held in mid-August, framework authors presented their final drafts while country case studies teams presented their work-in-progress.

Three framework papers were presented:

  • “Supporting Jobs for Young Women and Men in Africa: A Framework for Country-Level Analysis”. The paper proposed a four-step framework to identify and create opportunities to create jobs for young men and women. It explains how to identify promising sectors and activities with high growth and (youth) employment potential; how to identify economic and political constraints to developing key sectors relevant for youth employment; identification of general enabling and targeted policies for youth employment; and understanding the political economy around immediate actions to support youth employment.
  • “Using Output and Labour Multipliers to Target Incentives for fast Economic Recovery: The Cases of Ethiopia and Kenya”. The paper describes the use of input-output model to calculate output and labour multipliers which are helpful to understand the backward linkages and economy-wide employment generation of specific sectors.
  • “Drivers of Industrial Location and Job Creation Potential in Africa”. The framework paper describes the analysis of the drivers of industrial location: investment climate, exports, agglomeration and firm capabilities. The paper also discusses some practical steps to move from the drivers of industrial location to a country level diagnostic, and the value chain analysis.

The following are some key preliminary findings from the country case-studies:

  • Egypt; agriculture, extraction of petroleum and mining, manufacturing, and service industries have the highest youth-employment-generating potential. Leather with an employment multiplier of 14.98, food products (4.27) and real-estate (2.66) are sectors with highest employment multipliers. Youth employment and industries with higher employment multiplier tend to be clustered around regions of Greater Cairo, the Delta and upper Egypt.
  • Ethiopia; agricultural (74%) and service sectors (0.27%) registered the highest productivity growth during the 2015-2018 period. Dynamic productivity growth is negative and highest in the industrial sector (-11.6%) and service sector (-9.6%) suggesting that labour does not move to sectors with high productivity growth or away from the sectors with low productivity growth.
  • Kenyan; informal sector, agriculture, services, tourism, trade, construction, education and ICT sectors have the highest potential for job creation. The employment multipliers are as follows: agriculture (2.1), transport (1.74), trade (1.89), construction (1.84), and education (1.85). The main constraints to job creation include perceptions that the tax rate is high, high number of procedures required to start a business, and high burden of customs procedures, corruption, and business costs of crime and violence.
  • Nigeria; construction sector (with employment elasticity of 0.40) was the fastest growing sector and the sector with the most intensive jobs trade sector. Other sectors with positive employment elasticity and hence with higher potential for youth employment include service (0.05) while agriculture, industry and service sectors had negative employment and productivity growth/elasticity.
  • Tunisian; agro-food sector had the highest aggregate productivity growth (6.5%) followed by construction materials, ceramics and glass sector (4.5%) and chemical sector (4.2%). The economy was unable to efficiently reallocate resources from low-return to high-return activities. The economy also operates below potential as evidenced by the low rate of GDP growth, and insufficient and low-quality jobs. Structural mismatch between demand for unskilled labour (in trade, service and textile sectors) and growing supply for skilled labour (60% of new job entrants have university degree) has led to an increase in unemployment (30% of university graduates remain unemployed).
  • Mali; 9 out of 13 industries had employment creation potential for women and young people aged 15-35 years. The level of employment potential is higher in the agricultural (52.27%) and trade activities (42.35%) but absent in the financial and insurance activities (-0.11%), information and communication activities (-0.17%), and public administration activities (-1.07%). Women and young people have lower access to employment in all sectors of the economy. This is more pronounced in the industrial sector.
  • Uganda; sectors with potential to increase the number of youths (18-30 years) in employment are; tea, coffee, wholesale and retail trade, agro-processing and animal husbandry. The labour income multiplier are highest in the service sector (0.21 units), followed by agriculture (0.18 units) and finally, the industrial sector (0.16 units), and within service sector and industrial sectors, skilled youths are the main beneficiaries of youth labour income multipliers while unskilled youth benefit most in the agricultural sector.

 

The country case study researchers will present their final draft papers in the final dissemination workshop early next year. The findings of this project will also be documented in form of framework papers, country case studies papers, synthesis papers and policy briefs.

Connected themes
Share this post

Leave a Reply

Your email address will not be published.

Related items

Identifying growth sectors for youth employment

Improving labour market outcomes requires increasing youth’s access to employment opportunities, but one of the main contributors to the unemployment problem is the lack of productive opportunities.