Labour Market Institutions, Innovation and Youth Employment in sub-Saharan Africa

Abidemi C. Adegboye ()
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Abidemi C. Adegboye: University of Lagos

The Indian Journal of Labour Economics, 2025, vol. 68, issue 1, No 10, 203-219

Abstract: Abstract In this study, the effects of labour market institutions (LMIs) and innovation on youth employment are examined using data for 27 sub-Saharan African (SSA) countries over the period 2007 and 2019. The feasible generalised least squares method is employed in the empirical analysis. The study finds that a combination of flexible (employment protection) and tight (wage adjustments) LMIs is the best means of improving youth employment among SSA countries. Moreover, while R&D (research & development) expenditure of firms (demand-side innovation) promotes youth employment in the region, more supply-side focussed innovations are found to directly limit youth employment. It is, however, found that LMIs temper the effects of innovation on youth employment. In particular, LMIs favour innovations that are supply side, but limit the positive effects of demand-side innovation on employment. Policy measures on reforming LMIs and promoting innovation for improving youth employment are provided in the study.

Keywords: Employment protection; Innovation; Labour market flexibility; Wage bargaining; Wage adjustment; Youth employment (search for similar items in EconPapers)
JEL-codes: J21 J23 J53 K3 O32 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s41027-025-00556-2

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