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Labor Market Regulations in Sub-Saharan Africa, With a Focus on Senegal

Author

Listed:
  • Stephen Golub
  • Aly Mbaye
  • Hanyu Chwe

    (Swarthmore College
    Professor of Economics)

Abstract
Disappointing job creation in Sub-Saharan Africa (SSA), despite improved economic growth, is drawing greater attention to the labor market. Recent research has highlighted the paucity of formal employment and large disparities between formal and informal sector incomes. Formal private sector wage employment has grown too slowly to offset declines in public sector employment and to keep up with labor force growth, so employment remains overwhelmingly informal, with very low wages, no benefits or job security, and hazardous working conditions. The question arises as to whether labor market regulations play a role in limiting formal sector employment creation. We combine quantitative and qualitative assessments of labor-market regulations in SSA, and compare them to countries in other regions, particularly Asia, using indicators of labor market restrictions around the world, and conducting case studies of selected countries. We carried out an in-depth study of Senegal based on interviews and original data collection, and less detailed studies of Ethiopia and Ghana in SSA and Bangladesh and China in Asia. Our main conclusion is that labor market regulations are a less important obstacle than lack of infrastructure and general weaknesses in the business climate, but do contribute to holding back formal employment growth in Senegal and other SSA countries.

Suggested Citation

  • Stephen Golub & Aly Mbaye & Hanyu Chwe, 2015. "Labor Market Regulations in Sub-Saharan Africa, With a Focus on Senegal," Working Papers 201505, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:201505
    as

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    File URL: https://commerce.uct.ac.za/sites/default/files/content_migration/commerce_uct_ac_za/1093/files/DPRU%2520WP201505.pdf
    File Function: First version, 2015
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    References listed on IDEAS

    as
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    Cited by:

    1. Rodriguez Castelan, Carlos & Vazquez, Emmanuel, 2022. "Labor Informality and Market Segmentation in Senegal," IZA Discussion Papers 15564, Institute of Labor Economics (IZA).
    2. Ahmadou Aly Mbaye & Stephen Golub & Anastasia Vasilyeva, 2019. "Senegal’s International Competitiveness and Employment Creation for Women and Youth. The Product Space Analysis and Fieldwork Findings," Working Papers idrcdprusenegal, University of Cape Town, Development Policy Research Unit.

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    More about this item

    Keywords

    Labor market regulations; Sub-Saharan Africa; informal & formal employment; relative unit labor costs; manufacturing;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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