Economic and Social Research Foundation (ESRF)
Institutional Affiliation: Economic and Social Research Foundation (ESRF)
NBER Working Papers and Publications
|December 2016||Economic Transformation in Africa from the Bottom Up: Evidence from Tanzania|
with Xinshen Diao, Margaret McMillan: w22889
At roughly 4% per annum, labor productivity in Tanzania has grown more rapidly over the past 12 years than at any other time in recent history. Employment growth has also been strong keeping up with population growth at roughly 2.5 percent per annum; the bulk of employment growth (90%) has been in the non-agricultural sector. However, the vast majority of this non-agricultural employment growth has occurred in the informal sector. Using Tanzania’s first nationally representative survey of micro, small and medium sized enterprises - we show that firms in the informal sector contributed roughly half a percentage point to economy-wide labor productivity growth in Tanzania between 2002 and 2012. However, virtually all of the labor productivity growth contributed by informal firms came from a s...