Employment growth linkages: some comments

1. Employment growth linkages: some comments Andy McKay University of Sussex

2. Shared growth workshop Rwanda • Some main messages • Higher school attendance associated with lower participation • Big increase in output per worker, associated mainly with sectoral shifts (esp. shift out of agric) • Increased wage work and multiple job holding • Increased earnings in agric, reduced elsewhere • First definitely correct, fourth probably; have some comments on second and third

3. Shared growth workshop Survey comparability • 2000/01 and 2005/06 surveys highly comparable in most respects, including consumption • But substantial adjustment to labour module • EICV1: questions on primary and secondary job • EICV2: respondents list all activities, and details collected

4. Shared growth workshop Survey comparability (2) • Primary defined by respondent in first survey; not a priori clear how to define in second case • Tendency to report agric as primary activity even if not … shift out of agric likely to be exaggerated • Second survey likely to pick up many more activities than first … so comparison of multiple jobs may not be reliable either

5. Shared growth workshop Survey comparability (3) • Second survey seems to be more successful at collecting instances of agric wage work – this increase may also be exaggerated

6. Shared growth workshop Sectoral shifts • Nevertheless, basic story of sectoral shifts seems correct, if exaggerated • Importance of domestic service • Increase in agricultural wage work probably also correct … but this is not likely to be a positive development

7. Shared growth workshop

8. Shared growth workshop Future work • Care in analysis of distribution of jobs! • Certainly scope for analysis of earnings • Analysis of why increased earnings in agric • Separate wage/nonwage • Increased export production may be part of story • Nature of agricultural wage labour: supply and demand • Analysis of areas of growth in non-agric work

9. Shared growth workshop Madagascar • Significant contrast with Rwanda • But like Rwanda output per worker drives output per capita changes – but this time negative • Negative growth, but lower poverty, less low earners and less working poor

10. Shared growth workshop Madagascar (2) • Increased numbers working in primary sector, AND increased earnings • This seems to be a driving factor of poverty reduction • Why the increased earnings? • Non-poor also moving into agric, they seem to be getting poorer • Reduced numbers in secondary and tertiary, and reduced earnings

11. Shared growth workshop Madagascar (3) • Positive correlation between sectoral expansion and earnings • Is this plausible? Explanation? • Poorer quintiles earn more from tertiary sector, and richer quintiles earn less; this must be an important explanation of the poverty reduction • Relative importance of this and agric growth in accounting for poverty reduction?

12. Shared growth workshop Madagascar (4) • Potentially substantial variation in wage rates by sector, needs to be analysed more