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The Case of Ethiopia
of jobs created in start-ups rose by more than 40,000, which was twice the number of jobs lost because of plant closures over the period. There was some job growth in continuing establishments; however, it was intermittent and on a far smaller scale than the rate of job creation via new entries. The number of jobs in continuing establishments increased by fewer than 10,000 (or about 10 percent). See box 2.1 for a detailed discussion on job growth in Ethiopian manufacturing.
BOX 2.1
According to the 2016 manufacturing census of Ethiopia, there were some 2,600 manufacturers in the country, with a combined regular workforce of about 210,000 employees. This represents significant job growth relative to what the census recorded 20 years earlier, during the 1996 round, which was 82,000 workers employed in about 620 establishments.
Manufacturing jobs are increasingly concentrated in younger establishments, and this pattern is evident sectorwide as well as within all but one of the size groups of establishments. Figure 2.3 shows that jobs have always been most concentrated in the youngest age group and are becoming more so. There has been significant job growth over the period 2005–16 in establishments ages 11–20 years within the smallest size group, but that is only about one-fifth of the total job growth that took place in the size group over the decade. There was no job growth among establishments in this size group that were older than 20 years.
This pattern is repeated in figure 2.4 for establishments employing 21–100 workers. Here also, little job growth is observed in establishments older than 20 years throughout the two decades of observations. Job growth accelerated substantially among establishments that were 10 years old or younger, and it was not as high but significant and steady in the 11–20 year age group.
Figure 2.5 shows a similar pattern among establishments in the 101–500 employment size group. The pattern here neatly replicates the sectorwide picture in figure 2.1, whereby the employment share of establishments that are 10 years old or younger overtakes that of the older-than-20 group following a decade of steady job growth in the younger group, which picked up momentum all the way to 2016. There has not been significant job growth at any point among establishments that have been in the market for more than 20 years. Job growth has been steady and substantial for the 11–20 year age group, although not nearly as high as that for the youngest age group.
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This leads to the case of the largest size group, that is, establishments employing more than 500 workers, as portrayed in figure 2.6. The main difference between the pattern here and that for the other size groups is that jobs are most concentrated in the oldest age group—those that have been in operation for more than 20 years. This is the case even though there has not been any job growth in establishments older than 20 years for this size group, as was the case for the other size groups. All the same, the job growth recorded by the largest size group is as high as that of the smaller employment groups during the 20 years of observations. As in the case of the other size groups, most of the job growth in large establishments was recorded in establishments that had been in operation for no more than 10 years. There has been steady and significant job growth in establishments ages 11–20 years but at a lower rate than that observed in younger establishments.
Côte d’Ivoire
Between 2003 and 2014, the manufacturing sector in Côte d’Ivoire generated a net total of about 24,000 jobs. During the same period, entering and surviving establishments created more than 101,000 and 19,000 jobs, respectively, whereas exiting manufacturers resulted in a loss of about 96,000 jobs (see Abreha et al. 2019). In the latter years, most of the manufacturing jobs were highly concentrated in younger establishments, especially those that had been in operation between 11 and 20 years (figure 2.9). As expected and similar to what is observed in Ethiopian manufacturing, most of the jobs were concentrated in large establishments (figure 2.10). Additionally, there are no size effects—that is, job growth was not significantly different in smaller or larger establishments (see Abreha et al. 2019).
Although most of the jobs are concentrated in continuing establishments (figure 2.11), figure 2.12 indicates substantial age effects, whereby start-ups and young establishments have been the main drivers of manufacturing job growth although their relative shares in aggregate employment have been significantly lower compared with those in Ethiopia. However, there is a significant contrast in how the age of establishments affects manufacturing job growth in the two countries, as depicted in figures 2.7 and 2.8, and figures 2.11 and 2.12, for Ethiopia and Côte d’Ivoire, respectively. New establishments have played a lesser role in job growth in Côte d’Ivoire than in Ethiopia, which seems to be related to the lower entry and exit rates in Côte d’Ivoire compared with those in Ethiopia.
Figure 2.9 Côte d’Ivoire: Number of Workers, by Manufacturer Age Group, 2003–14
Number of workers 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10 years or less 11–20 years More than 20 years All
Source: Abreha et al. 2019.
Figure 2.10 Cóte d’Ivoire: Number of Workers, by Manufacturer Size Group, 2003–14
Number of workers 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20 workers or less More than 500 workers 21–100 workers All 101–500 workers
Source: Abreha et al. 2019.
Figure 2.11 Côte d’Ivoire: Workforce Size, by Manufacturer Operating Status, 2003–14
Number of workers 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Continuing establishments Entering establishments All
Source: Abreha et al. 2019.
Figure 2.12 Côte d’Ivoire: Annual Percentage Rate of Job Growth, by Manufacturer
Operating Status, 2003–14
30
Rate of job growth (%) 20
10
0
–10
–20
–30 2004 2005
2006 2007 2008 2009 2010 2011 2012 2013 2014 Net growth Growth due to establishment entry Growth in continuing establishments Decline due to establishment exit
Source: Abreha et al. 2019.
