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Ms. Louise Fox, Cleary Haines, Ms. Jorge Huerta Munoz, and Mr. Alun H. Thomas

economic expansion in 50 years. They show that agriculture still employs the majority of the labor force, despite only accounting for about 13 percent of GDP in 2010. In part this is because the employment transformation always lags the output transformation ( Timmer, 1988 ). But the shift is slower in sub-Saharan Africa because the demographic transition is also lagging, so the labor force is still large and growing rapidly—much faster than in low and lower-middle-income countries in Asia, for example. Disaggregating the regional trend by country type, it is shown that

Ms. Louise Fox, Mr. Alun H. Thomas, and Cleary Haines

: (202) 623-7201 E-mail: publications@imf.org www.imfbookstore.org www.elibrary.imf.org Contents Contributors Overview 1. Output, Demographic, and Employment Transformation in Sub-Saharan Africa Output Demographics Employment Transformation 2. Transformation and Productivity: Comparison with Asia Productivity Transformation 3. Projecting Output, Employment, and Productivity Forward through 2020 4. Conclusion Appendix Reference Figures 1. Sub-Saharan Africa and Asia: Real GDP Growth 2. Selected

Ms. Louise Fox, Mr. Alun H. Thomas, and Cleary Haines
This paper provides the most complete analysis of the structural transformation among low- and low-middle-income countries in sub-Saharan Africa to date.
Ms. Louise Fox, Mr. Alun H. Thomas, and Cleary Haines

Chapter 1. Output, Demographic, and Employment Transformation in Sub-Saharan Africa and Asia Structural transformation has become a widely used macroeconomic measure of the quality of the economic development process. 1 It is widely accepted that in order for it to happen, two processes have to be going on simultaneously: (1) a shift of GDP out of agriculture into modern industrial and service enterprises, and (2) following output, a shift in employment out of agriculture into the new nonagricultural enterprises, which necessarily involves migration and

Ms. Louise Fox, Cleary Haines, Ms. Jorge Huerta Munoz, and Mr. Alun H. Thomas
Estimates of the current and future structure of employment in sub-Saharan Africa (2005–20) are obtained based on household survey estimates for 28 countries and an elasticity-type model that relates employment to economic growth and demographic outcomes. Agriculture still employs the majority of the labor force although workers are shifting slowly out of the sector. Sub-Saharan Africa’s projected rapid labor force growth, combined with a low baseline level of private sector wage employment, means that even if sub-Saharan Africa realizes another decade of strong growth, the share of labor force employed in private firms is not expected to rise substantially. Governments need to undertake measures to attract private enterprises that provide wage employment, but they also need to focus on improving productivity in the traditional and informal sectors as these will continue to absorb the majority of the labor force.
Ms. Louise Fox, Cleary Haines, Ms. Jorge Huerta Munoz, and Mr. Alun H. Thomas
Mr. Alun H. Thomas

– 207 . Margaret S. McMillan & Dani Rodrik , 2011 . “ Globalization, Structural Change and Productivity Growth , ” NBER Working Papers 17143 , National Bureau of Economic Research, Inc. Rodrik , D. , “ An African Growth Miracle, ” Institute for Advanced Study , Princeton , April 2014 World Bank , 2012 , “ Raising Productivity and Reducing the Risks of Household Enterprises in Rwanda ”, mimeo January World Bank , 2013 , Youth Employment in Sub-Saharan Africa 1 This may underestimate the employment

Mr. Alun H. Thomas
This paper documents the structural transformation in employment that has taken place in Sub-Saharan Africa (SSA) over the past 15 years. In contrast to Asian economies, where at least half of the labor flows out of agriculture have gone into industry, in SSA, most of the workers have ended up in the service sector, especially household enterprises. Rwanda has been one of the stellar performers in SSA in terms of structural transformation with the strongest movement of workers out of agriculture. Contrary to conventional wisdom, except for the very top of the distribution of consumption in Rwanda, families in household enterprises now consume as much as non-agricultural wage earners.