Labor Productivity and Employment Gaps in Sub-Saharan Africa

Drawing on a new set of nationally
representative, internationally comparable household
surveys, this paper provides an overview of key features of
structural transformation—labor allocation and labor
productivity—in four African economies. New, micro-based
measures of sector labor allocation and cross-sector
productivity differentials describe the incentives
households face when allocating their labor. These measures
are similar to national accounts-based measures that are
typically used to characterize structural changes in African
economies. However, because agricultural workers supply far
fewer hours of labor per year than do workers in other
sectors, productivity gaps disappear almost entirely when
expressed on a per-hour basis. What look like large
productivity gaps in national accounts data could really be
employment gaps, calling into question the prospective gains
that laborers can achieve through structural transformation.
These employment gaps, along with the strong linkages
observed between rural non-farm activities and primary
agricultural production, highlight agricultures continued
relevance to structural change in Sub-Saharan Africa.