Vulnerable employment in developing economies: The case of sub-Saharan African countries

Abstract

This study investigates the development of vulnerable employment in 43 sub‐Saharan African countries by using yearly data for 1996–2018 period. The paper first outlines the main factors and discusses the issue from the perspective of developing countries, and then constructs a panel data elasticity model. The model expands the economic growth framework further and assesses the effects of rurality, sectoral composition, demography, and the quality of economic and political institutions. Prais–Winsten robust estimation results for the expanded model show nonindustrial employment to be the main source of vulnerable employment. Additionally, the increase in urban population share is found to have a positive impact, while nonemployed population is negatively associated. The results also show that upper‐middle income countries differ from low and lower‐middle income groups with regard to the significance of economic and political institutions. These findings clarify the prominence of the Sustainable Development Goals policy agenda and gradual reform strategies beginning with economic quality toward improvement of political institutions. At the end, we highlight several policy implications.