The Dynamics of Job Creation and Job Destruction in an African Economy: Evidence from Ethiopia

The Dynamics of Job Creation and Job Destruction in an African Economy: Evidence from Ethiopia

Author: 
Admasu Shiferaw
Publisher: 
Oxford University Press (OUP)
Date published: 
2013
Record type: 
Responsibility: 
Bedi, Arjun S., Jt. author
Journal Title: 
Journal of African Economies
Source: 
Journal of African Economies, Vol. 22, No. 5, November 2013, pp. 651-692
Abstract: 

A growing share of manufacturing in GDP and in employment is a common feature observed in successful developing countries. Manufacturing, however, has not been a major source of employment in Ethiopia and in other Sub-Saharan African countries. This paper relies on a unique census-based panel data covering the period 1996–2007 to analyse the micro-dynamics of aggregate employment changes. The analysis shows that the weak employment performance of Ethiopian manufacturing is not due to limited job creation but a consequence of simultaneous offsetting processes of job creation and destruction. We find strong evidence of intra-industry job mobility and attribute a substantial proportion of job creation and destruction to firm entry and exit. However, jobs created by small firms tend to be transitory and there has been a re-allocation of jobs from small to larger firms during periods of faster aggregate net employment growth. Overall, the evidence suggests that employment growth and job re-allocation are not necessarily restrained by labour laws and regulations.

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Country focus: 

CITATION: Admasu Shiferaw. The Dynamics of Job Creation and Job Destruction in an African Economy: Evidence from Ethiopia . : Oxford University Press (OUP) , 2013. Journal of African Economies, Vol. 22, No. 5, November 2013, pp. 651-692 - Available at: http://library.au.int/dynamics-job-creation-and-job-destruction-african-economy-evidence-ethiopia-4