Labor Market Regulations in Sub-Saharan Africa, With a Focus on Senegal

Stephen Golub, Aly Mbaye and Hanyu Chwe ()
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Hanyu Chwe: Swarthmore College

Working Papers from University of Cape Town, Development Policy Research Unit

Abstract: Disappointing job creation in Sub-Saharan Africa (SSA), despite improved economic growth, is drawing greater attention to the labor market. Recent research has highlighted the paucity of formal employment and large disparities between formal and informal sector incomes. Formal private sector wage employment has grown too slowly to offset declines in public sector employment and to keep up with labor force growth, so employment remains overwhelmingly informal, with very low wages, no benefits or job security, and hazardous working conditions. The question arises as to whether labor market regulations play a role in limiting formal sector employment creation. We combine quantitative and qualitative assessments of labor-market regulations in SSA, and compare them to countries in other regions, particularly Asia, using indicators of labor market restrictions around the world, and conducting case studies of selected countries. We carried out an in-depth study of Senegal based on interviews and original data collection, and less detailed studies of Ethiopia and Ghana in SSA and Bangladesh and China in Asia. Our main conclusion is that labor market regulations are a less important obstacle than lack of infrastructure and general weaknesses in the business climate, but do contribute to holding back formal employment growth in Senegal and other SSA countries.

Keywords: Labor market regulations; Sub-Saharan Africa; informal & formal employment; relative unit labor costs; manufacturing (search for similar items in EconPapers)
JEL-codes: K2 L2 L5 R0 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-12
New Economics Papers: this item is included in nep-afr, nep-cse, nep-env and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Working Paper Series by the Development Policy Research Unit, December 2015, pages 1-35

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