The Puzzle of Educated Unemployment in West Africa

Esther Mirjam Girsberger and Romuald Méango

No 15721, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Many developing countries exhibit a puzzling pattern given their scarce human capital: unemployment rates increase with education. We develop and estimate a model where educated unemployment arises from heterogeneous workers participating in a frictional labour market with three sectors (public, private and self-employment). We estimate that public sector distortions explain around two-thirds of educated unemployment in urban Burkina Faso and one-quarter in Senegal. We then simulate three equally costly policies. In contrast with public job creation and subsidies to self-employment income, subsidies for private sector vacancy creation effectively reduce educated unemployment and improve aggregate workers' welfare.

Keywords: unemployment; education; search and matching model; urban West Africa (search for similar items in EconPapers)
JEL-codes: E24 J24 J64 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2022-11
New Economics Papers: this item is included in nep-afr, nep-dev, nep-dge and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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