Original scientific paper

https://doi.org/10.2478/zireb-2022-0017

Macroeconomic Shocks and Employment in sub-Sharan Africa: Do Labour Market Institutions Matter?

Abidemi C. Adegboye orcid.org/0000-0003-0558-6701 ; University of Lagos, Akoka-Yaba, Lagos, Nigeria
Ifeoluwa Alao-Owunna ; Adeleke University, Ede, Osun State, Nigeria
Folake R. Bank-Ola ; Adeleke University, Ede, Osun State, Nigeria

Abstract

The effects of macroeconomic shocks and labour market institutions on employment in sub-Saharan African countries are examined in this study. Using a sample of 27 SSA countries for the period 2007 to 2018, both linear and interactive relationships are investigated. The results show that labour market institutions (especially in terms of wage flexibility) dampen the effects of shocks on modern employment but amplify the effects of shocks on informal employment in the sampled SSA countries. There is also evidence that shocks themselves (especially those emanating from the external sector) do not matter for a huge proportion of employment changes in SSA countries. Rather, the direct effects of shocks on employment are more profound in the formal sector. The study therefore concludes that reforming the informal sector will help to ensure the effectiveness of labour market institutions in mitigating the negative impacts of external shocks on employment in SSA.

Keywords

hiring and firing; sectoral employment; terms of trade; vulnerable employment; wage flexibility

Hrčak ID:

286085

URI

https://hrcak.srce.hr/286085

Publication date:

21.11.2022.

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