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Informal work in sub-Saharan Africa: Dead end or stepping-stone?

Michael Danquah
Michael Danquah
, 
Simone Schotte
Simone Schotte
 oraz 
Kunal Sen
Kunal Sen
   | 20 lis 2021
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Data publikacji: 20 lis 2021
Zakres stron: -
Przyjęty: 27 maj 2021
DOI: https://doi.org/10.2478/izajodm-2021-0015
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© 2021 Michael Danquah et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Work status classification.Source: Authors’ own construct.
Work status classification.Source: Authors’ own construct.

Figure 2

Labor income dynamics.Note: Each point shows the estimated marginal effect on changes in log earnings by initial and destination employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12.
Labor income dynamics.Note: Each point shows the estimated marginal effect on changes in log earnings by initial and destination employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12.

Figure C1

ANOVA of log mean labor income (in 2005 PPPs) across work status groups.Note: Coefficient estimates and 95% confidence interval of fitted one-way ANOVA model of log mean labor income using formal self-employment as the base category, controlling for wave fixed effects.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; PPP, Purchasing power parity; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.
ANOVA of log mean labor income (in 2005 PPPs) across work status groups.Note: Coefficient estimates and 95% confidence interval of fitted one-way ANOVA model of log mean labor income using formal self-employment as the base category, controlling for wave fixed effects.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; PPP, Purchasing power parity; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.

Figure C2

Marginal effect on employment transition probabilities, by country and destination state.Note: Average marginal effects estimated from same model specification and controls as in Table 3 but including interactions between the initial work status and country fixed effects. Each point shows the estimated marginal effect on the employment transition probability by country and destination state, with “lower-tier informal self-employed” being the base category in each country. The dashed lines show the 95% confidence intervals. Work status abbreviations: F, formal, IF U, informal upper-tier, IF L, informal lower-tier; SE, self-employed; WE, wage employed.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.
Marginal effect on employment transition probabilities, by country and destination state.Note: Average marginal effects estimated from same model specification and controls as in Table 3 but including interactions between the initial work status and country fixed effects. Each point shows the estimated marginal effect on the employment transition probability by country and destination state, with “lower-tier informal self-employed” being the base category in each country. The dashed lines show the 95% confidence intervals. Work status abbreviations: F, formal, IF U, informal upper-tier, IF L, informal lower-tier; SE, self-employed; WE, wage employed.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.

Figure C3

Coefficient estimate on change in log earnings, split-sample regressions.Note: Coefficient estimates based on same model specification and controls as in Table B10, but splitting the sample by initial formality status (formal, upper-tier informal, lower-tier informal) and initial occupational position (wage employed, self-employed). Standard errors have been clustered at the country level. Each point shows the estimated marginal effect on log earnings by employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.
Coefficient estimate on change in log earnings, split-sample regressions.Note: Coefficient estimates based on same model specification and controls as in Table B10, but splitting the sample by initial formality status (formal, upper-tier informal, lower-tier informal) and initial occupational position (wage employed, self-employed). Standard errors have been clustered at the country level. Each point shows the estimated marginal effect on log earnings by employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.

Figure C4

Coefficient estimate on log earnings, panel fixed effects regression.Note: Coefficient estimates based on fixed effects panel regression, controlling for individual's age and age squared and country-time fixed effects. Standard errors have been clustered at the country level. Each point shows the estimated marginal effect on log earnings by employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.
Coefficient estimate on log earnings, panel fixed effects regression.Note: Coefficient estimates based on fixed effects panel regression, controlling for individual's age and age squared and country-time fixed effects. Standard errors have been clustered at the country level. Each point shows the estimated marginal effect on log earnings by employment state, with “Informal Lower” and “Wage Employed” being the base categories. The dashed lines show the 95% confidence intervals.Source: Authors’ own calculations based on survey data from GSPS 2009/10-2013/14, NIDS 2014/15-2017, TZNPS 2010/11-2012/13, and UNPS 2010/11-2011/12. GSPS, Ghana Socioeconomic Panel Study Survey; NIDS, National Income Dynamics Study; TZNPS, Tanzania National Panel Study; UNPS, Uganda National Panel Study.

Transition matrices across work status groups

WAVE t = 1 Share of stayers
Wage employed Self-employed
Formal Informal Formal Informal
Upper Lower Upper Lower
a) Ghana
WAVE t = 0 Wage employed Formal 65.1 6.9 9.6 4.3 3.6 10.6 8.6
Informal Upper 33.0 11.8 23.7 2.5 3.2 25.8 0.6
Lower 21.7 5.3 32.2 7.5 6.4 26.9 6.1
Self-employed Formal 2.1 3.4 12.1 29.5 15.8 37.1 2.6
Informal Upper 4.0 2.5 15.2 14.7 44.7 18.9 5.3
Lower 2.1 2.0 15.8 6.8 6.3 67.2 28.1
TOTAL 21.0 4.5 18.4 9.1 11.2 35.8 51.3
b) South Africa
WAVE t = 0 Wage employed Formal 83.3 7.1 5.8 2.2 1.1 0.5 47.2
Informal Upper 50.1 25.1 14.7 6.0 1.0 3.1 2.2
Lower 26.4 13.1 47.7 4.7 3.9 4.3 10.2
Self-employed Formal 13.0 9.7 5.1 50.8 13.3 8.1 2.0
Informal Upper 12.2 11.1 19.5 16.1 23.5 17.6 1.3
Lower 14.7 6.2 16.8 6.9 24.6 30.8 1.1
TOTAL 63.4 9.9 14.9 5.2 3.4 3.1 64.0
c) Tanzania
WAVE t = 0 Wage employed Formal 79.7 4.4 9.7 1.5 1.0 3.6 9.3
Informal Upper 45.8 5.8 33.1 6.5 2.9 6.0 0.2
Lower 14.8 0.9 62.4 2.9 3.5 15.5 17.9
Self-employed Formal 2.0 0.0 5.0 31.7 18.2 43.1 2.9
Informal Upper 4.5 0.0 21.8 15.2 23.1 35.4 0.9
Lower 5.8 1.5 15.3 8.3 4.1 64.9 28.2
TOTAL 22.2 1.8 27.3 8.6 6.0 34.2 59.3
d) Uganda
WAVE t = 0 Wage employed Formal 58.0 27.0 8.1 5.2 0.0 1.7 6.8
Informal Upper 20.0 48.3 14.1 5.7 6.1 5.9 5.2
Lower 4.7 6.2 68.3 2.7 4.3 13.9 17.7
Self-employed Formal 2.7 0.0 10.5 20.7 15.0 51.1 0.6
Informal Upper 0.0 4.6 5.0 13.9 39.8 36.8 2.3
Lower 2.2 1.0 11.9 4.4 7.2 73.2 31.2
TOTAL 14.8 13.3 24.3 5.7 7.9 34.1 63.9

Distribution of workers by work status (%), extended definition

Ghana South Africa Tanzania Uganda
a) Proportion of employment by work status (incl. family farms and unemployment)
Wage employed Formal 6.8 44.3 3.9 4.0
Informal Upper 2.8 7.0 1.1 3.7
Lower 9.8 16.7 9.5 8.8
Self-employed Formal 4.6 3.1 3.0 1.1
Informal Upper 6.2 4.2 1.3 2.0
Lower 21.7 2.9 14.4 14.5
Family farms 43.4 0.9 65.5 65.0
Unemployment 4.8 21.0 1.3 1.0
TOTAL 100 100 100 100
b) Proportion of formal vs. informal employment (incl. family farms as informal lower)
Formal 12.0 59.9 7.0 5.1
Informal Upper 9.4 14.2 2.4 5.7
Lower 78.6 25.9 90.6 89.2
TOTAL 100 100 100 100

Basic socioeconomic, labor market and institutional indicators, 2010–2017

Ghana South Africa Tanzania Uganda
GDP per capita
Annual (constant 2017 PPP $) 4,505 12,731 2,256 2,004
Growth rate (annual %) 4.4 0.4 3.4 1.7
Sectoral contribution to GDP (% of GDP)
Agriculture 21.9 2.2 26.6 26.2
Industry 28.6 26.6 25.1 25.5
Services 42.8 61.1 40.6 42.0
Poverty headcount (% of population)
$1.90 a day (2011 PPP) 12.0 17.5 49.5 38.5
$3.20 a day (2011 PPP) 30.1 36.5 78.2 68.5
Educational attainment (% of population 25+ years) (cumulative)
At least completed primary 64.7 81.4 64.8 38.4
At least completed lower secondary 54.3 74.5 11.0 26.4
At least completed upper secondary 20.6 61.5 3.4 10.3
Sector employment (% of total) (modeled ILO estimate)
Agriculture 41.6 5.0 68.3 70.1
Industry 16.2 23.7 6.1 7.2
Services 42.2 71.3 25.5 22.6
Public sector employment
Public sector employment as a share of formal employment (%) 45.4 22.7 49.8 39.5
Union membership
Share of private paid employees with union membership (%) 17.5 20.4 9.4 3.0
Ease of doing business
Score (0 = lowest performance to 100 = best performance) 57.8 65.7 52.5 57.3
Number of start-up procedures to register a business 7.6 6.5 11.3 14.0
Days required to start a business 12.9 45.3 29.5 26.8
New business density (registrations per 1,000 people ages 15–64) 1.0 7.2 0.3 0.9
Quality of institutions
Governance quality index (1–10) 6.5 6.1 5.2 5.7
Regulatory performance in paying taxes (1–100) 66.3 81.2 53.8 73.0
Workers’ Rights (1–100) 79.0 86.0 71.0 70.0

Distribution of workers by work status (%)

Ghana South Africa Tanzania Uganda
a) Proportion of employment by work status
Wage employed Formal 13.2 56.7 11.7 11.7
Informal Upper 5.3 8.9 3.3 10.8
Lower 18.9 21.4 28.6 26.0
Self-employed Formal 8.9 4.0 9.1 3.1
Informal Upper 11.9 5.4 3.9 5.8
Lower 41.8 3.7 43.4 42.6
TOTAL 100 100 100 100
b) Proportion of formal vs. informal employment
Formal 22.1 60.6 20.7 14.9
Informal Upper 17.2 14.3 7.2 16.6
Lower 60.7 25.1 72.0 68.6
TOTAL 100 100 100 100
c) Proportion of upper-tier informality in informal employment
Upper informal in total informal employment 22.1 36.4 9.1 19.4
Upper informal in informal self-employment 22.2 59.7 8.2 11.9
Upper informal in informal wage employment 22.0 29.4 10.5 29.4

Change in log labor earnings

All countries Excl. South Africa
Variables (1) (2) (3) (4)
Log labor earnings (t = 0) −0.335*** (0.057) −0.334** (0.058) −0.375* (0.123) −0.375* (0.124)
Formality status in t = 0 (base: Lower informal in t = 0)
Formal (t = 0) −0.033 (0.037) −0.033 (0.035) 0.018 (0.045) 0.016 (0.044)
Upper informal (t = 0) −0.023 (0.023) −0.025 (0.024) 0.016 (0.031) 0.021 (0.030)
Formality status in t = 0 and t = 1 (base: Lower informal in t = 0 and t = 1)
Formal (t = 0) × Formal (t = 1) 0.337** (0.081) 0.330** (0.077) 0.240 (0.101) 0.243 (0.110)
Formal (t = 0) × Upper informal (t = 1) 0.136 (0.076) 0.133 (0.073) 0.014 (0.080) 0.013 (0.087)
Upper informal (t = 0) × Formal (t = 1) 0.257*** (0.029) 0.256*** (0.030) 0.265** (0.035) 0.260** (0.045)
Upper informal (t = 0) × Upper informal (t = 1) 0.071 (0.057) 0.070 (0.056) 0.109 (0.118) 0.099 (0.121)
Lower informal (t = 0) × Formal (t = 0) 0.206*** (0.022) 0.206*** (0.021) 0.211* (0.054) 0.212* (0.054)
Lower informal (t = 0) × Upper informal (t = 0) 0.082* (0.029) 0.095* (0.033) 0.067 (0.062) 0.069 (0.045)
Employment status in t = 0 (base: Wage employed in t = 0)
Self-employed (t = 0) 0.045 (0.106) −0.091** (0.014)
Employment status in t = 0 and t = 1 (base: Wage employed in t = 0 and t = 1)
Self-employed (t = 0) × Self-employed (t = 0) −0.090 (0.054) −0.021 (0.041)
Wage employed (t = 0) × Self-employed (t = 0) 0.015 (0.104) −0.067 (0.087)
Characteristics in t = 0
Level of education (base: No schooling)
Primary 0.058 (0.036) 0.061 (0.031) 0.076 (0.036) 0.076 (0.029)
Post-primary 0.103** (0.022) 0.106*** (0.018) 0.104* (0.033) 0.108* (0.032)
Secondary 0.205*** (0.035) 0.207*** (0.032) 0.212* (0.054) 0.219* (0.063)
Post-secondary 0.328*** (0.039) 0.332*** (0.037) 0.227** (0.045) 0.236** (0.055)
Tertiary 0.542*** (0.089) 0.544*** (0.088) 0.474* (0.143) 0.482* (0.154)
Age 0.005 (0.004) 0.004 (0.003) 0.004 (0.009) 0.003 (0.008)
Age squared (×0.01) −0.004 (0.004) −0.004 (0.004) −0.002 (0.009) −0.001 (0.008)
Female −0.134** (0.029) −0.135** (0.030) −0.152 (0.082) −0.157 (0.083)
Urban 0.076** (0.023) 0.076** (0.023) 0.095 (0.064) 0.100 (0.062)
Country (base: Uganda)
South Africa 0.110 (0.052) 0.102 (0.067)
Tanzania 0.073 (0.033) 0.067 (0.036) 0.096 (0.094) 0.097 (0.099)
Uganda −0.014 (0.018) −0.021 (0.023) 0.013 (0.058) 0.013 (0.065)
Sample selection
Panel retention From t = 0 to t = 1 −0.021 (0.029) −0.018 (0.024) −0.136 (0.149) −0.140 (0.140)
Employed (non-farm) in t = 0 0.005 (0.010) 0.005 (0.011) −0.044 (0.115) −0.038 (0.114)
Constant 1.500** (0.269) 1.504** (0.269) 1.765* (0.490) 1.805* (0.484)
Observations 7,240 7,240 2,760 2,760
Adj. R2 0.371 0.376 0.382 0.384

Data sources

Country Survey t = 0 t = 1
Ghana GSPS Wave I (2009/10) Wave II (2013/14)
South Africa NIDS Wave IV (2014/15) Wave V (2017)
Tanzania TZNPS Wave II (2010/11) Wave III (2012/13)
Uganda UNPS Wave II (2010/11) Wave III (2011/12)

Employment dynamics, including inactivity/unemployment as an additional destination state

Multinomial logistic regression Number of obs = 9,851
Average marginal effects on work status in t = 1 Log-likelihood = −12,048
Base outcome: Lower-tier informal wage employed Pseudo R2 = 0.284
Variables (1) (2) (3) (4) (5) (6)
Formal wage employed Upper-tier informal wage employed Lower-tier informal wage employed Formal self-employed Upper-tier informal self-employed Inactive/unemployed
Work status in t = 0 (base: lower-tier informal self-employed)
(1) Formal wage employed 0.584*** (0.016) 0.051*** (0.009) −0.002 (0.020) −0.070*** (0.009) −0.052*** (0.018) −0.271*** (0.012)
(2) Upper-tier informal wage employed 0.264*** (0.011) 0.168*** (0.007) 0.084*** (0.019) −0.048*** (0.009) −0.038** (0.017) −0.210*** (0.022)
(3) Lower-tier informal wage employed 0.130*** (0.008) 0.053*** (0.013) 0.228*** (0.023) −0.054*** (0.010) −0.028* (0.015) −0.137*** (0.019)
(4) Formal self-employed −0.006 (0.012) 0.006 (0.013) −0.022* (0.012) 0.195*** (0.024) 0.051* (0.027) −0.168*** (0.017)
(5) Upper-tier informal self-employed 0.008 (0.010) 0.023** (0.011) 0.008 (0.023) 0.027** (0.013) 0.151*** (0.044) −0.101*** (0.038)
Level of education (base: no schooling)
Primary 0.035** (0.016) 0.001 (0.007) −0.065** (0.027) 0.018*** (0.005) 0.002 (0.004) −0.003 (0.018)
Post-primary 0.093*** (0.017) 0.012 (0.020) −0.113*** (0.032) 0.040*** (0.004) 0.006 (0.005) −0.021 (0.019)
Secondary 0.157*** (0.024) 0.011 (0.017) −0.157*** (0.033) 0.042*** (0.003) 0.001 (0.009) −0.036** (0.015)
Post-secondary 0.219*** (0.028) 0.031* (0.019) −0.204*** (0.035) 0.082*** (0.017) 0.005 (0.010) −0.072*** (0.014)
Tertiary 0.329*** (0.029) 0.013 (0.014) −0.249*** (0.040) 0.088*** (0.032) −0.009 (0.018) −0.099*** (0.023)
Age 0.015*** (0.004) 0.002 (0.001) −0.001 (0.001) 0.006* (0.003) 0.002 (0.002) −0.030*** (0.006)
Age squared (×0.01) −0.018*** (0.004) −0.003 (0.002) −0.001 (0.001) −0.006* (0.004) −0.003 (0.002) 0.038*** (0.006)
Female −0.050*** (0.010) 0.016*** (0.003) −0.028* (0.016) −0.023*** (0.003) −0.019*** (0.001) 0.078*** (0.024)
Urban 0.012*** (0.004) −0.022*** (0.005) 0.015 (0.016) 0.006 (0.007) −0.009*** (0.004) 0.018 (0.013)
Country (base: Ghana)
South Africa 0.085*** (0.007) 0.020*** (0.003) −0.035*** (0.008) −0.020*** (0.005) −0.032*** (0.002) 0.107*** (0.006)
Tanzania 0.162*** (0.017) −0.021*** (0.004) 0.030*** (0.006) 0.026*** (0.002) −0.024*** (0.004) −0.188*** (0.005)
Uganda −0.053*** (0.003) 0.100*** (0.009) 0.042*** (0.007) −0.009*** (0.002) 0.016*** (0.002) −0.151*** (0.009)
Sample selection
Panel retention From t = 0 to t = 1 −0.037 (0.039) −0.020* (0.012) −0.033*** (0.012) −0.012 (0.009) −0.015* (0.008) 0.031 (0.030)
Employed (non-farm) in t = 0 −0.034 (0.033) −0.009 (0.013) −0.003 (0.022) 0.001 (0.013) −0.022*** (0.007) 0.087 (0.056)

Employment transitions

Multinomial logistic regression Number of obs = 7,816
Average marginal effects on work status in t = 1 Log-likelihood = −7,851.1291
Base outcome: Lower-tier informal wage employed Pseudo R2 = 0.3353
(1) (2) (3) (4) (5)
Variables Formal wage employed Upper-tier informal wage employed Lower-tier informal wage employed Formal self-employed Upper-tier informal self-employed
Work status in t = 0 (base: lower-tier informal self-employed)
(1) Formal wage employed 0.628*** (0.028) 0.037** (0.016) −0.066** (0.033) −0.128*** (0.014) −0.096*** (0.029)
(2) Upper-tier informal wage employed 0.293*** (0.026) 0.192*** (0.015) 0.044 (0.033) −0.099*** (0.014) −0.078*** (0.028)
(3) Lower-tier informal wage employed 0.153*** (0.008) 0.062** (0.024) 0.264*** (0.042) −0.104*** (0.016) −0.062** (0.025)
(4) Formal self-Employed −0.045* (0.026) −0.007 (0.023) −0.079*** (0.020) 0.227*** (0.033) 0.043 (0.044)
(5) Upper-tier informal self-employed −0.012 (0.024) 0.028 (0.022) −0.023 (0.030) 0.016 (0.014) 0.201*** (0.056)
Level of education (base: no schooling)
Primary 0.053*** (0.018) 0.001 (0.009) −0.089*** (0.025) 0.023*** (0.006) 0.001 (0.004)
Post-primary 0.121*** (0.023) 0.011 (0.026) −0.160*** (0.033) 0.050*** (0.005) 0.004 (0.005)
Secondary 0.196*** (0.025) 0.008 (0.022) −0.223*** (0.034) 0.052*** (0.003) −0.002 (0.012)
Post-secondary 0.246*** (0.028) 0.026 (0.022) −0.283*** (0.036) 0.096*** (0.020) −0.000 (0.012)
Tertiary 0.342*** (0.024) −0.001 (0.019) −0.337*** (0.041) 0.107*** (0.038) −0.016 (0.020)
Age 0.003 (0.003) −0.002 (0.002) −0.010*** (0.003) 0.006 (0.004) 0.000 (0.002)
Age squared (×0.01) −0.002 (0.004) 0.002 (0.003) 0.009*** (0.003) −0.006 (0.005) −0.001 (0.003)
Female −0.037*** (0.009) 0.029*** (0.003) −0.008 (0.011) −0.021*** (0.005) −0.016*** (0.001)
Urban 0.029*** (0.006) −0.027*** (0.007) 0.015 (0.018) 0.007 (0.009) −0.013*** (0.004)
Country (base: Ghana)
South Africa 0.122*** (0.006) 0.037*** (0.007) 0.005 (0.012) −0.010 (0.006) −0.020*** (0.003)
Tanzania 0.112*** (0.018) −0.033*** (0.004) −0.019*** (0.006) 0.017*** (0.002) −0.036*** (0.005)
Uganda −0.106*** (0.005) 0.099*** (0.010) 0.011 (0.007) −0.018*** (0.002) 0.007*** (0.002)
Sample selection
Panel retention from t = 0 to t = 1 −0.044** (0.020) −0.019** (0.009) −0.026* (0.015) −0.007 (0.011) −0.009 (0.013)
Employed (non-farm) in t = 0 0.011 (0.012) −0.002 (0.021) 0.010 (0.022) 0.005 (0.014) −0.025** (0.010)

Employment dynamics, using ordered logistic regression

Ordered logistic regression, average marginal effects, split sample
(1) (2) (3)
Formality status in t = 0 Lower-tier informal Upper-tier informal Formal
Formality status in t = 1 Formal Upper-tier informal Formal Lower-tier informal Upper-tier informal Lower-tier informal
Variables
Employment status (base: Wage employed)
Self-employed −0.036 (0.026) −0.013 (0.012) −0.122** (0.057) 0.114** (0.055) 0.081*** (0.007) 0.185*** (0.034)
Level of education (base: no schooling)
Primary 0.033 (0.020) 0.019** (0.008) 0.022 (0.021) −0.033 (0.035) −0.034* (0.020) −0.125* (0.073)
Post-primary 0.121** (0.053) 0.056*** (0.011) 0.117 (0.080) −0.145 (0.109) −0.069*** (0.016) −0.197*** (0.055)
Secondary 0.208*** (0.074) 0.077*** (0.005) 0.238*** (0.068) −0.245*** (0.093) −0.092*** (0.020) −0.232*** (0.055)
Post-secondary 0.281*** (0.043) 0.084*** (0.004) 0.328*** (0.076) −0.300*** (0.096) −0.114*** (0.024) −0.263*** (0.059)
Tertiary 0.575*** (0.064) 0.048** (0.023) 0.554*** (0.101) −0.395*** (0.084) −0.133*** (0.024) −0.286*** (0.054)
Age 0.003 (0.004) 0.001 (0.001) 0.013 (0.010) −0.011 (0.009) −0.004** (0.002) −0.007** (0.003)
Age squared (×0.01) −0.002 (0.004) −0.001 (0.001) −0.014 (0.009) 0.012 (0.009) 0.004* (0.002) 0.006* (0.004)
Female −0.066** (0.031) −0.023*** (0.005) −0.014 (0.048) 0.013 (0.044) 0.019*** (0.005) 0.034*** (0.009)
Urban 0.021* (0.012) 0.007 (0.006) 0.046** (0.019) −0.042** (0.018) 0.001 (0.007) 0.003 (0.013)
Country (base: Ghana)
South Africa 0.102*** (0.015) 0.036*** (0.009) 0.068*** (0.010) −0.061*** (0.010) −0.058*** (0.012) −0.122*** (0.004)
Tanzania 0.038 (0.031) 0.016** (0.007) 0.027 (0.035) −0.026 (0.033) −0.049*** (0.004) −0.106*** (0.008)
Uganda −0.040*** (0.010) −0.021* (0.012) −0.080*** (0.014) 0.090*** (0.015) 0.013*** (0.001) 0.045*** (0.005)
Sample selection
Panel retention From t = 0 to t = 1 −0.144* (0.082) −0.049*** (0.014) −0.024 (0.044) 0.021 (0.040) 0.026* (0.014) 0.045 (0.030)
Employed (non-farm) in t = 0 0.013 (0.023) 0.004 (0.009) 0.090*** (0.030) −0.082*** (0.026) 0.025* (0.014) 0.043* (0.024)
Observations 2,869 1,166 3,781
Pseudo R2 0.0728 0.0614 0.1220

Transition matrices across work status groups, including additional destination states (family farms under lower-tier informal self-employment and unemployment)

WAVE t = 1 Share of stayers
Wage employed Self-employed Unempl.
Formal Informal Formal Informal
Upper Lower Upper Lower
a) Ghana
WAVE t = 0 Wage employed Formal 59.0 6.2 8.7 3.9 3.2 16.7 2.2 7.8
Informal Upper 25.7 9.2 18.5 2.0 2.5 40.5 1.6 0.5
Lower 15.5 3.8 22.9 5.4 4.5 41.2 6.8 4.3
Self-employed Formal 1.1 1.7 6.2 14.9 8.0 64.2 4.0 1.3
Informal Upper 2.2 1.3 8.2 8.0 24.2 52.4 3.8 2.9
Lower 0.8 0.8 6.5 2.8 2.6 83.5 3.1 34.9
TOTAL 11.9 2.6 10.5 5.2 6.4 59.7 3.7 51.7
b) South Africa
WAVE t = 0 Wage employed Formal 78.9 6.7 5.5 2.1 1.0 0.7 5.1 44.7
Informal Upper 42.0 21.0 12.4 5.0 0.9 2.7 16.1 1.9
Lower 22.0 10.9 39.8 3.9 3.2 3.9 16.2 8.5
Self-employed Formal 10.8 8.0 4.2 42.0 11.0 8.5 15.5 1.7
Informal Upper 9.9 9.0 15.8 13.1 19.1 14.3 18.8 1.0
Lower 10.0 4.2 11.4 4.7 16.7 21.2 31.9 0.8
TOTAL 56.9 8.9 13.4 4.7 3.1 3.0 10.1 58.6
c) Tanzania
WAVE t = 0 Wage employed Formal 71.9 4.0 8.8 1.4 0.9 12.7 0.4 8.4
Informal Upper 40.5 5.1 29.2 5.7 2.5 15.9 1.1 0.2
Lower 11.1 0.7 46.7 2.2 2.6 35.9 0.8 13.4
Self-employed Formal 1.6 0.0 4.1 25.8 14.8 53.6 0.0 2.3
Informal Upper 3.8 0.0 18.5 12.9 19.6 45.2 0.0 0.8
Lower 3.8 1.0 9.9 5.4 2.7 74.8 2.5 32.5
TOTAL 16.5 1.3 20.4 6.4 4.5 49.6 1.3 57.5
d) Uganda
WAVE t = 0 Wage employed Formal 57.7 26.8 8.1 5.2 0.0 2.2 0.0 6.8
Informal Upper 17.8 43.1 12.6 5.1 5.5 16.0 0.0 4.7
Lower 3.2 4.2 46.1 1.8 2.9 41.4 0.5 12.0
Self-employed Formal 2.6 0.0 10.1 19.8 14.3 53.3 0.0 0.6
Informal Upper 0.0 3.7 4.0 11.2 32.1 49.1 0.0 1.8
Lower 1.2 0.5 6.3 2.3 3.8 85.4 0.5 36.4
TOTAL 10.2 9.1 16.7 3.9 5.4 54.3 0.3 62.3

Average worker characteristics by work status

Ghana South Africa Tanzania Uganda
a) Average age (years)
Wage employed Formal 43.5 (0.53) 37.5 (0.16) 40.5 (0.52) 36.1 (0.71)
Informal Upper 36.4 (0.82) 35.6 (0.37) 33.4 (1.00) 34.7 (0.84)
Lower 38.4 (0.46) 35.4 (0.25) 30.3 (0.35) 30.5 (0.53)
Self-employed Formal 41.5 (0.64) 41.3 (0.72) 37.5 (0.54) 34.8 (1.29)
Informal Upper 40.3 (0.53) 40.2 (0.54) 34.7 (0.83) 38.8 (0.95)
Lower 40.8 (0.29) 38.6 (0.69) 31.0 (0.33) 34.8 (0.47)
TOTAL 40.5 (0.19) 37.2 (0.12) 32.7 (0.20) 34.1 (0.29)
b) Share of female workers (%)
Wage employed Formal 33.7 (2.41) 41.5 (0.75) 32.5 (2.15) 41.3 (3.77)
Informal Upper 30.0 (3.55) 57.0 (1.65) 35.5 (4.33) 34.3 (3.80)
Lower 33.8 (1.91) 44.3 (1.09) 34.0 (1.55) 26.8 (2.12)
Self-employed Formal 47.9 (3.24) 45.8 (3.00) 36.0 (2.83) 39.7 (6.60)
Informal Upper 50.0 (2.67) 40.3 (2.25) 25.4 (3.73) 29.4 (4.25)
Lower 81.7 (1.08) 58.4 (2.96) 63.9 (1.31) 47.9 (1.85)
TOTAL 56.8 (0.90) 44.2 (0.55) 46.7 (0.87) 38.9 (1.19)
c) Share of workers with secondary or tertiary education (%)
Wage employed Formal 52.2 (3.02) 63.7 (0.74) 36.4 (2.29) 60.1 (3.88)
Informal Upper 37.8 (4.04) 55.5 (1.66) 39.9 (4.76) 59.7 (4.09)
Lower 19.1 (1.76) 28.0 (0.98) 1.2 (0.36) 11.8 (1.66)
Self-employed Formal 18.6 (2.80) 69.3 (2.78) 2.4 (0.91) 42.9 (6.74)
Informal Upper 10.0 (1.82) 28.6 (2.07) 3.3 (1.56) 37.3 (4.59)
Lower 8.3 (0.95) 33.0 (2.82) 1.7 (0.38) 12.2 (1.29)
TOTAL 19.0 (0.83) 52.5 (0.55) 7.1 (0.47) 25.8 (1.13)

Change in distribution of workers by work status, balanced panel

Ghana South Africa Tanzania Uganda
a) Change (ppts) in proportion of employment by work status
Wage employed Formal 1.7 −0.4 5.0 −2.7
Informal Upper −2.5 1.6 −2.4 0.0
Lower −3.8 −3.3 −0.4 0.7
Self-employed Formal 0.8 2.0 −2.8 1.3
Informal Upper −1.5 −0.5 0.7 0.5
Lower 5.3 0.6 −0.1 0.3
b) Change (ppts) in proportion of formal and informal employment
Formal 2.5 1.5 2.3 −1.5
Informal Upper −4.0 1.1 −1.7 0.5
Lower 1.5 −2.6 −0.5 1.0
c) Change (ppts) in proportion of self-employment
Self-employed 4.6 2.1 −2.2 2.1

Excludability of instruments from main employment dynamics equation

Head of household Sample member in the previous wave
F-statistic (p-value) 0.1800 0.9647

(Non-farm) employment and panel retention rates (%)

Ghana South Africa Tanzania Uganda
Employed (non-farm) Panel retention Employed (non-farm) Panel retention Employed (non-farm) Panel retention Employed (non-farm) Panel retention
Percentage share 51.7 70.8 78.1 75.9 33.2 69.1 34.0 71.9

Probability of employment (non-farm) in the baseline and panel retention

Variables Ghana South Africa Tanzania Uganda
(1) (2) (1) (2) (1) (2) (1) (2)
Employed (non-farm) Panel retention Employed (non-farm) Panel retention Employed (non-farm) Panel retention Employed (non-farm) Panel retention
Level of education (base: no schooling)
Primary 0.164* (0.086) −0.044 (0.080) −0.040 (0.025) 0.013 (0.024) 0.091*** (0.013) 0.014 (0.013) −0.052** (0.022) 0.004 (0.020)
Post-primary 0.216** (0.085) −0.034 (0.079) −0.047* (0.024) 0.013 (0.023) 0.332*** (0.019) 0.014 (0.018) 0.108*** (0.029) −0.033 (0.026)
Secondary 0.328*** (0.088) −0.044 (0.082) 0.001 (0.024) 0.010 (0.024) 0.602*** (0.038) 0.127*** (0.032) 0.089** (0.035) −0.030 (0.031)
Post-secondary 0.506*** (0.093) −0.018 (0.090) 0.069*** (0.025) −0.013 (0.025) 0.556*** (0.045) 0.024 (0.045) 0.356*** (0.040) −0.041 (0.037)
Tertiary 0.521*** (0.091) −0.081 (0.089) 0.160*** (0.028) −0.022 (0.032) 0.593*** (0.063) 0.145*** (0.040) 0.124** (0.063) −0.111* (0.059)
Age 0.033*** (0.004) 0.052*** (0.003) 0.026*** (0.002) 0.010*** (0.002) 0.004* (0.002) 0.031*** (0.002) 0.010*** (0.003) 0.027*** (0.003)
Age squared (×0.01) −0.042*** (0.005) −0.064*** (0.004) −0.024*** (0.003) −0.013*** (0.003) −0.010*** (0.003) −0.039*** (0.003) −0.016*** (0.004) −0.030*** (0.004)
Female 0.189*** (0.017) −0.015 (0.014) −0.089*** (0.008) 0.061*** (0.008) −0.001 (0.011) −0.074*** (0.010) −0.115*** (0.015) 0.019 (0.013)
Urban 0.264*** (0.012) −0.032** (0.015) 0.113*** (0.008) −0.011 (0.008) 0.375*** (0.007) −0.092*** (0.011) 0.340*** (0.015) −0.050*** (0.016)
Head of household 0.268*** (0.018) 0.106*** (0.008) 0.108*** (0.012) 0.140*** (0.017)
Sample member in the previous wave n.a.n.a. 0.234*** (0.008) 0.044*** (0.012) 0.073*** (0.016)
Wald test of rho = 0 15.216 10.086 17.313 9.811
F-statistic (p-value) 0.000 0.002 0.000 0.002
Observations 6,718 21,498 7,870 4,315
eISSN:
2520-1786
Język:
Angielski
Częstotliwość wydawania:
Volume Open
Dziedziny czasopisma:
Business and Economics, Political Economics, Microeconomics, Macroecomics, Economic Policy, Mathematics and Statistics for Economists, Econometrics
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