Wage Price Floors and Sectoral Employment Outcomes in Ghana

Richard Kofi Asravor () and Frank Gyimah Sackey ()
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Richard Kofi Asravor: Ghana Communication Technology
Frank Gyimah Sackey: Ghana Communication Technology

The Indian Journal of Labour Economics, 2022, vol. 65, issue 1, No 6, 103-122

Abstract: Abstract This paper investigates the effect of daily minimum wage regulation and other covariates variables on sectoral employment generation in Ghana. The Cobb–Douglas and constant elasticity of substitution production functions were employed as the theoretical foundation for this study. Secondary Data sourced from World Development Indicators (2018) from 1991 to 2018 was used while the autoregressive distributed lag was used as the estimation. The finding confirms the insider outsider and the Phillips curve argument and also shows that sectoral employment in Ghana is supported by economic growth and foreign direct investment. Daily minimum wage negatively affects the sectoral employment, with the agricultural employment being the worst affected. Interest rate decreases total employment, whereas population growth decreases employment in the agricultural sector. The study recommends that the agricultural sector should be given a lower interest rate for loans acquired as this will help expand agricultural business and capacity.

Keywords: Sectoral employment; Labour demand; Minimum wage; Economic growth: Ghana (search for similar items in EconPapers)
JEL-codes: E24 J31 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s41027-022-00364-y

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