Search

Purpose – The purpose of this paper is to analyse the causes of unemployment in Ghana from both labour demand and supply perspectives based on most recent cross sectional data set from one nationally representative household survey and a baseline survey for Millennium Development Support. Design/methodology/approach – A logit regression estimation technique is applied to two different household survey data sets of 2008 and 2013 to capture the effect of labour demand and supply on unemployment. Findings – Using education and age as capability variables to represent supply factors, unemployment is found to increase with education, and declines with age, confirming higher unemployment rate among the youth, than the old. The paper also observes strong influence of demand factors on unemployment based on relatively higher incidence of unemployment fulltime jobseekers relative to part-time jobseekers and seekers of formal or wage-employment and self-employment or SMEs compared with those seeking any job. Other factors such as the individual’s reservation wage, marital status, sex and poverty status as well as their rural-urban location are also found to cause unemployment in Ghana. Practical implications – Unemployment as a result of the inability of individuals to obtain a job of their choice in the midst of strong economic growth in Ghana suggests weak employment content of growth. In contrast, an increasing phenomenon of unemployment with education also reflects a problem of skill mismatch between skills churn out by education and training institutions and skills requirement by firms in the labour market. Originality/value – The originality of the paper and its contribution to existing literature largely emanate from the inclusion of demand factors in a cross sectional analysis of causes of unemployment. [ABSTRACT FROM AUTHOR]

While the role of search effort in the transition from unemployment to employment is not contentious, there is paucity of empirical evidence on the nexus between search effort and the duration of unemployment, especially in developing countries. Hence, this paper focuses on the time period in which the individual exits unemployment, using search intensity as a key explanatory variable. Data for the study is sourced from a survey of 404 formal sector workers in Accra who secured their first employment from 2005 and 2012. We disaggregated the transition period into three intervals namely; less than 1 month, between 1 and 12 months and more than 12 months, in order to achieve this objective. Using the multinomial logistic regression, we found that the use of multiple methods (search intensity) in the search process has a highly significant (p<0.001) effect on the probability of entering employment. In particular, using two additional methods decrease the probability of finding employment in less than 1 month by 11.4 percentage points but raises the prospect of entering into employment in the 1-12 months period by 9.8 percentage points. Other variables that significantly explain the duration of unemployment include age, years of schooling, sector of employment (private sector), family support and the year of employment. The paper concludes with a recommendation to realign the Labor Market Information System to the dynamics of the labor market [ABSTRACT FROM AUTHOR]

Unemployment is often cited as a measure of the low employment content of Ghana's strong growth performance over the past three decades. The paper presents evidence to suggest that employment growth in Ghana continues to trail economic growth due to high growth of low employment generating sectors against sluggish growth of high labour absorption sectors. A cross-sectional estimation of a probit regression model also indicates a strong effect of demand factors on unemployment, indicating a weak employment generating impact of economic growth. Empirical analysis also confirms higher vulnerability of youth and urban dwellers to unemployment with education and gender explaining unemployment in some instances. Reservation wage is also observed to have an increasing effect of unemployment. The paper recommends policies that promote investment in agriculture and manufacturing which is associated with higher employment elasticity of output. High incidence of unemployment among the youth and secondary school leavers in the most recent period requires targeted intervention including support for entrepreneurial training and start-up capital to attract young school leavers to become 'creators' rather than 'seekers' of jobs. A downward review of expectations on the part of jobseekers in terms of their reservation wage could help reduce unemployment in Ghana. [ABSTRACT FROM AUTHOR]