Fifth Ethiopia Economic Update : Why So Idle? Wages and Employment in a Crowded Labor Market
Strong economic growth continued in 2014-15, but the drought slowed down Ethiopia’s growth to 8 percent in 2015-16. Exports have had their worst performance in the last decade and the current account balance remained large. Inflation is remarkable...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/463121480932724605/5th-Ethiopia-economic-update-why-so-idle-wages-and-employment-in-a-crowded-labor-market-draft-for-public-launch http://hdl.handle.net/10986/25747 |
| Summary: | Strong economic growth continued in
2014-15, but the drought slowed down Ethiopia’s growth to 8
percent in 2015-16. Exports have had their worst performance
in the last decade and the current account balance remained
large. Inflation is remarkable stable given the recent
drought and even declining; it stood at 5.6 percent in
October 2016. Understanding the nature of urban labor
markets is important for a successful transition to a
manufacturing and service-oriented economy and to further
reduce poverty. Many urban labor market trends are moving in
the right direction although there has been little change in
the structure of urban labor markets over time. Although
jobs are being created faster than growth in the urban
workforce, not enough jobs are being created for those with
primary and secondary education. This economic update offers
five policy recommendations to enhance urban labor markets:
encourage firm creation and firm growth that creates jobs
for non-graduates; increase labor productivity in the
low-skill population segment by addressing constraints faced
by firms in accessing capital (financial and physical) to
ensure that the marginal product of labor increases above
the nutrition-based wage; invest further in job training and
technical training programs to build the skills of those in
the job market: both for low-skilled workers to increase
their productivity and for those with higher levels of
education to increase their skill base; introduce targeted
urban safety nets and labor market programs to invest in
skills of low skilled employees and the unemployed, and
provide financial support to enable their job search; and
enhance the use of information communication and technology
(ICT) to provide information on job vacancies throughout the
city and reduce the cost of job search. |
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