Central Data Catalog

Citation Information

Type Working Paper
Title Labor Productivity in Rural African Enterprises: Empirical Evidence from the LSMS-ISA
Publication (Day/Month/Year) 2014
URL http://www.econstor.eu/bitstream/10419/104665/1/dp8524.pdf
Although non-farm enterprises are ubiquitous in rural Sub-Saharan Africa, little is yet known
about their productivity. In this paper we contribute to filling this gap by providing estimates of
labor productivity in enterprises for Ethiopia, Malawi, Nigeria, and Uganda. Using the World
Bank’s LSMS-ISA database, we find that rural enterprises are on average less productive
than those in urban areas, and that female-owned enterprises are less productive than maleowned
enterprises. By estimating Heckman selection and panel data models, we find that
education and access to credit are associated with higher labor productivity, while
households that experience shocks operate less productive enterprises. Furthermore we
provide evidence that enterprises that operate throughout the year are more productive. We
conclude that gender, education, shocks, access to finance, and location matter for labor
productivity in rural Africa, and that policy decisions tackling the shortcomings could
significantly contribute to a better business environment and increased labor productivity.

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