Service Sector: The Source of Output and Employment Growth in Ethiopia

Zelalem Kabeta and Inderjeet Singh Sidhu ()

Academic Journal of Economic Studies, 2016, vol. 2, issue 4, 139-156

Abstract: According to official data, the Ethiopian economy has grown at 10.9% on average in 2004/05-2014/15. During this period a structural change is observed as agriculture declined in its share and service sector dominates the economy. Hence, in this study we used a Shapely decomposition method to identify the service sector contributions to per capita GDP and employment growth during two periods of (1999-2005) and (2005-2013). Per capita GDP was decomposed into employment rate, productivity, and demographic changes. The result shows that during (1999-2005) growth periods, Ethiopian per capita GDP growth was mainly contributed by employment rate changes originated from the agriculture sector. Whereas the service sector has the highest contribution in productivity but a negative contribution in employment change. However, during the high growth period of (2005-2013) the growth in per capita GDP is due to productivity growth which emanates from the service sectors specifically from the distributive service sector.

Keywords: Ethiopia; service sector; decomposition; employment and Per capita GDP (search for similar items in EconPapers)
JEL-codes: O1 O5 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:khe:scajes:v:2:y:2016:i:4:p:139-156

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