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on Africa |
| By: | Leonardo Iacovone, Vijaya Ramachandran, and Martin Schmidt |
| Abstract: | Many countries in Africa suffer high rates of underemployment or low rates of productive employment; many also anticipate large numbers of people to enter the workforce in the near future. This paper asks the question: Are African firms creating fewer jobs than those located in other parts of the world? And, if so, why? One reason may be that weak business environments slow the growth of firms and distort the allocation of resources away from better-performing firms, hence reducing their potential for job creation. The paper uses data from 41,000 firms across 119 countries to examine the drivers of job creation. We find that African firms, at any age, tend to be 20–24 percent smaller than comparable firms in other regions of the world. The poor business environment, driven by limited access to finance, and the lack of availability of electricity, land, and unskilled labor has some value in explaining this difference. Foreign ownership, the export status of the firm, and the size of the market are also significant determinants of employment levels. However, even after controlling for the business environment and for characteristics of firms and markets, about 60 percent of the size gap between African and non-African firms remains unexplained. Constraints imposed by the business environment and by market characteristics that limit the growth of African firms can be alleviated by policy reforms. But there appear to be constraints that are not captured by these measures--these require further research in order to design appropriate policies for job creation. |
| Keywords: | Africa, underemployment, finance, economic growth |
| JEL: | D22 D24 L2 L25 O12 O14 O55 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:353&r=all |
| By: | Andersson L. (UNU-MERIT) |
| Abstract: | This paper investigates the effect of international remittances and migration on household welfare in Ethiopia. We employ both subjective a households subjective economic well-being and objective measures asset holdings and asset accumulation to define household welfare. A matching approach is applied to address self-selection, and by exploiting information before and after the households began receiving remittances, the study sheds light on the changes in welfare associated with international migration and remittances. The results reveal that remittances have a significant impact on a welfare variable that has previously not received much attention in the migration literature, namely household subjective economic well-being. In addition, we find that remittances have positive effects on consumer asset accumulation, especially in rural areas, but no effect on productive assets. |
| Keywords: | International Migration; Remittances; Economic Development: Human Resources; Human Development; Income Distribution; Migration; |
| JEL: | F22 F24 O15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014004&r=all |
| By: | Leander Heldring |
| Abstract: | Exploiting local variation in state capacity within Rwanda I investigate the link between state capacity and violence. Using a disaggregated measure of the intensity of the 1994 Rwandan genocide, I establish that greater local state capacity led to greater conflict intensity. I proxy modern state capacity with its precolonial counterpart, measured by the total time a district was incorporated in the precolonial kingdom. This ‘duration of incorporation’ measures the cumulative effect of the centralizing forces in the kingdom and acts as a proxy for state capacity. Since the kingdom expanded through conquest and consolidated through patronage relations revolving around cattle, I instrument the duration of incorporation with the geographical suitability for cattle. This strategy confirms the main result. State capacity, while usually associated with greater public good provision and higher GDP, played a central role in the mass killings in Rwanda. |
| Keywords: | State capacity, violence, Rwanda |
| JEL: | O10 A10 N4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-08&r=all |