ECONOMIC POLICIES AND EMPLOYMENT ELASTICITY OF GROWTH IN SUB-SAHARAN AFRICA
- Abidemi C. Adegboye
- Nwanchukwu M. Nwaogu
- Monday I. Egharevba
- ( paper pages. 316 - 335 )
Abstract
The impact of policy dimensions on the employment elasticity of output growth was examined in this study using data from 37 sub- Saharan African (SSA) countries. It is argued that the patterns of policies based on institutional capacity of government provides a strong background for improving the relationships. Employing the two-stage least squares technique, employment elasticities for three differentsub-periods between 1991 and 2016 (1991-1999, 2000-2009, 2010-2016) were estimated for the 37 SSA countries. Then the effects of policies and policy interactions with changing macroeconomic factors (policy shifts) on employment elasticities were estimated using the feasible generalised least squares method. Policy directions were proxied by measures provided by the Fraser Institute’s Economic Freedom of the World database, while policy interactions were measured by multiplying policy interactions with target macroeconomic variables. Empirical analysis showed that policy interactions with target macroeconomic variables provide stronger employment yields when output grows. This implies that effective application of growth-led policies on particular macroeconomic sectors yields more beneficial employment outcomes than merely setting up policy benchmarksthat are economy-wide. Although overall policy directions tend to improve economic growth, there is need for careful balancing of policies that are regulatory in nature in order to achieve the required employment benefits.
Citation
Abidemi C. Adegboye, Nwanchukwu M. Nwaogu, Monday I. Egharevba.
2020.
"ECONOMIC POLICIES AND EMPLOYMENT ELASTICITY OF GROWTH IN SUB-SAHARAN AFRICA"
The Nigerian Journal of Economic and Social Studies,
62 (3): 316 - 335.
JEL Classification
E02, E24, J21, J4, L16
