Structural Transformation and Productivity Growth in Africa: Uganda in the 2000s

62 Pages Posted: 20 Apr 2016

See all articles by Sabin Ahmed

Sabin Ahmed

George Washington University

Taye Mengistae

World Bank

Yutaka Yoshino

The World Bank, Africa Region

Albert Zeufack

World Bank

Date Written: December 2, 2015

Abstract

Uganda?s economy underwent significant structural change in the 2000s whereby the share of non-tradable services in aggregate employment rose by about 7 percentage points at the expense of the production of tradable goods. The process also involved a 12-percentage-point shift in employment away from small and medium enterprises and larger firms in manufacturing and commercial agriculture mainly to microenterprises in retail trade. In addition, the sectoral reallocation of labor on these two dimensions coincided with significant growth in aggregate labor productivity. However, in and of itself, the same reallocation could only have held back, rather than aid, the observed productivity gains. This was because labor was more productive throughout the period in the tradable goods sector than in the non-tradable sector. Moreover, the effect on aggregate labor productivity of the reallocation of employment between the two sectors could only have been reinforced by the impacts on the same of the rise in the employment share of microenterprises. The effect was also strengthened by a parallel employment shift across the age distribution of enterprises that raised sharply the employment share of established firms at the expense of younger ones and startups. Not only was labor consistently less productive in microenterprises than in small and medium enterprises and larger enterprises across all industries throughout the period, it was also typically less productive in more established firms than in younger ones.

Keywords: Economic Theory & Research, International Trade and Trade Rules, Economic Growth, Marketing, Private Sector Development Law, Consumption, Industrial Economics, Private Sector Economics, Fiscal & Monetary Policy

Suggested Citation

Ahmed, Sabin and Mengistae, Taye Alemu and Yoshino, Yutaka and Zeufack, Albert, Structural Transformation and Productivity Growth in Africa: Uganda in the 2000s (December 2, 2015). World Bank Policy Research Working Paper No. 7504, Available at SSRN: https://ssrn.com/abstract=2698441

Sabin Ahmed (Contact Author)

George Washington University ( email )

2121 I Street NW
Washington, DC 20052
United States

Taye Alemu Mengistae

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Yutaka Yoshino

The World Bank, Africa Region ( email )

1818 H Street, N.W.
The World Bank MSN J5-500
Washington, DC 20433
United States
202-458-8308 (Phone)
202-614-8308 (Fax)

Albert Zeufack

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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