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Economic Regulation and Employment Intensity of Output Growth in Sub-Saharan Africa

  • Abidemi C. Adegboye
  • Monday I. Egharevba
  • Joel Edafe
Chapter

Abstract

The impact of economic regulation on the employment elasticity of output growth was examined for a group of 37 Sub-Saharan Africa (SSA) countries in this study. It is argued that market-based conditions may not be enough to generate employment-enhancing growth in a dual-sector economy. Rather, the level of regulation based on institutional capacity of government also provides strong background for improving the relationships. Empirical analysis in the study shows that there is a strong distinction between active regulation and institutional quality in terms of their effects on employment elasticities. Less economic regulation essentially enhances formal sector activities and employment, while the effects on informal and pro-poor employment is not straight-forward. Although overall regulation tends to improve both formal and informal sector employment, labour market flexibility tends to worsen informal sector employment. It is also found that intersectoral integration and adjustments play little roles in ensuring employment benefits from output growth when regulations are minimal regulations. There is, therefore, a need for careful balancing of regulations to address structural bottlenecks, improve informal sector activities and employment and ensure pro-poor growth in the region.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Abidemi C. Adegboye
    • 1
  • Monday I. Egharevba
    • 2
  • Joel Edafe
    • 2
  1. 1.Department of Economics and StatisticsUniversity of BeninBenin CityNigeria
  2. 2.Department of Finance and EconomicsBenson Idahosa UniversityBenin CityNigeria

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