Urban Agglomerations and Employment Transitions in Ethiopia

Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization a...

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Main Authors: Kamei, Akito, Nakamura, Shohei
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2020
Subjects:
Online Access:http://documents.worldbank.org/curated/en/800691584111128907/Urban-Agglomerations-and-Employment-Transitions-in-Ethiopia
http://hdl.handle.net/10986/33444
id okr-10986-33444
recordtype oai_dc
spelling okr-10986-334442022-09-20T00:13:49Z Urban Agglomerations and Employment Transitions in Ethiopia Kamei, Akito Nakamura, Shohei URBANIZATION LABOR MARKET URBAN AGGLOMERATION SPATIAL ECONOMICS INFORMALITY SELF-EMPLOYMENT WAGE EMPLOYMENT GENDER GAP Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wage employment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns. 2020-03-19T17:37:22Z 2020-03-19T17:37:22Z 2020-03 Working Paper http://documents.worldbank.org/curated/en/800691584111128907/Urban-Agglomerations-and-Employment-Transitions-in-Ethiopia http://hdl.handle.net/10986/33444 English Policy Research Working Paper;No. 9184 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Ethiopia
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic URBANIZATION
LABOR MARKET
URBAN AGGLOMERATION
SPATIAL ECONOMICS
INFORMALITY
SELF-EMPLOYMENT
WAGE EMPLOYMENT
GENDER GAP
spellingShingle URBANIZATION
LABOR MARKET
URBAN AGGLOMERATION
SPATIAL ECONOMICS
INFORMALITY
SELF-EMPLOYMENT
WAGE EMPLOYMENT
GENDER GAP
Kamei, Akito
Nakamura, Shohei
Urban Agglomerations and Employment Transitions in Ethiopia
geographic_facet Africa
Ethiopia
relation Policy Research Working Paper;No. 9184
description Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wage employment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns.
format Working Paper
author Kamei, Akito
Nakamura, Shohei
author_facet Kamei, Akito
Nakamura, Shohei
author_sort Kamei, Akito
title Urban Agglomerations and Employment Transitions in Ethiopia
title_short Urban Agglomerations and Employment Transitions in Ethiopia
title_full Urban Agglomerations and Employment Transitions in Ethiopia
title_fullStr Urban Agglomerations and Employment Transitions in Ethiopia
title_full_unstemmed Urban Agglomerations and Employment Transitions in Ethiopia
title_sort urban agglomerations and employment transitions in ethiopia
publisher World Bank, Washington, DC
publishDate 2020
url http://documents.worldbank.org/curated/en/800691584111128907/Urban-Agglomerations-and-Employment-Transitions-in-Ethiopia
http://hdl.handle.net/10986/33444
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