Essays on the labour market in Ghana

Nimoh, C

Abstract

Using a three-essay approach, we focus on three issues related to the labour market: unemployment, underemployment and informal sector employment.
Essay 1 looks at unemployment, the job search and job expectations of the unemployed using a probit model. The results show that unemployment is inequitably distributed in Ghana with the incidence of unemployment highest among the youth, medium educated, Christian, single, residents of Accra and urban dwellers, all of which have plausible explanation. The results also show that the nature of unemployment is diverse among men and women. This is because, the effects of the explanatory variables differ between both genders, which is highlighted by the low exit rate from unemployment into employment among women relative to men. Evidence shows that job creation has not been sufficient due to the higher probability of unemployed individuals who had expected to secure wage employment relative to self-employment and any employment.
In Essay 2 we employ the probit model to test the likelihood of an individual becoming underemployed. Additionally, we use the Fairlie decomposition analysis to explain the gender gap in underemployment. The results show that underemployment is high among women and agricultural sector workers. Additionally, in 2012/13, the U-shaped distribution of underemployment with respect to education became flatter than it was in 2005/06. In other words, while there was an unusual U-shaped relationship between underemployment and education, which is reflected amongst individuals in 2005/06, in 2012/13 the U-shaped distribution became flatter. The difference in male and female underemployment is explored in the essay and unobserved characteristics such as employer discrimination or quality of education cannot be ruled out. Results show that the female-male gap is widened by residing in urban areas and been married with education explaining the gender gap in some instance.
The final essay uses a finite mixture model to test the heterogeneous nature of the Ghanaian informal sector. The chapter seeks to understand whether workers are able to self-select into formal and informal sector employment. We find no evidence of workers been able to self-select into formal sector employment. Thus, workers face entry barriers that restrict them from moving into formal sector employment. Evidence shows that some workers choose to work in the informal sector due to comparative advantage, whilst for others, it is a place of last resort to avoid unemployment.

• Thesis Type: Thesis
• Acceptance Date: Oct 30, 2018
• Deposit Date: Nov 28, 2018
• Publicly Available Date: Nov 28, 2018
• Award Date: Oct 30, 2018