Economics at your fingertips  

Small firms, structural change and labor productivity growth in Africa: Evidence from Tanzania

Xinshen Diao, Josaphat Kweka and Margaret McMillan ()

World Development, 2018, vol. 105, issue C, 400-415

Abstract: At roughly 4 percent per annum, labor productivity in Tanzania grew more rapidly between 2002 and 2012 than at any other time in recent history. Roughly 80 percent of this productivity growth is accounted for by structural change as employment shares in agriculture declined while employment shares in services and manufacturing rose. Although employment in the formal sector has increased, the bulk of employment growth is accounted for by firms in the informal sector; these informal firms contributed more than one percentage point to economywide labor productivity growth. However, 94% of this labor productivity growth came from a very small subset of informal firms that belong to the in-between sector – a term meant to capture the idea that some of the firms in the informal sector share characteristics with firms in formal sector. An argument is made for targeting these firms for financial and other business services as a means of generating sustained and inclusive labor productivity growth in Tanzania’s manufacturing and services sectors.

Keywords: Structural change; Employment; Labor productivity; Tanzania; Small firms (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-16
Handle: RePEc:eee:wdevel:v:105:y:2018:i:c:p:400-415