Africa’s Evolving Employment Structure: Causes and Consequences

Abstract

We document the evolving trends in sectoral composition of Africa’s workforce, with particular attention to youth and rural/urban areas using nationally representative data from nine countries. Trends are similar when examining employment in terms of counts of jobs vs. full-time equivalents, but the share of the workforce in non-farm employment is considerably higher using the latter measure. Employment trends observed for the youth are also remarkably similar to that of the total working-age po pulation, regardless of whether we define youth as between 15-24 or 15-35 years of age. While acknowledging variability across countries, we generally observe a sharp exit of labor from farming to off-farm activities in the last decade indicative of the economic transformation underway in the region. The pace of labor exit from farming is more pronounced in countries that experienced relatively strong agricultural productivity growth. There is a corresponding rapid percentage growth in employmen t shares in the off-farm sectors both within the agri-food system and the non-farm sector. However, the off-farm segment of the agri-food system is particularly growing from an initial low base and hence will not generate as many new jobs as farming and the non-farm sector. Despite its declining employment share, farming remains the single largest employer and extremely important for livelihoods and economic growth due to its strong linkages with other sectors. Strategies that effectively raise the returns to labor in farming will be thus be crucial to building broad-based and inclusive economic growth and fostering successful economic transformation.