Working Paper: NBER ID: w20077
Authors: Margaret S. McMillan; Kenneth Harttgen
Abstract: We show that much of Africa's recent growth and poverty reduction can be traced to a substantive decline in the share of the labor force engaged in agriculture. This decline has been accompanied by a systematic increase in the productivity of the labor force, as it has moved from low productivity agriculture to higher productivity manufacturing and services. These declines have been more rapid in countries where the initial share of the labor force engaged in agriculture is the highest and where commodity price increases have been accompanied by improvements in the quality of governance.
Keywords: African growth miracle; structural change; agriculture; manufacturing; services
JEL Codes: O13; O4; Q16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Decline in the share of the labor force engaged in agriculture (J43) | Increase in output per worker (O49) |
| Decline in the share of the labor force engaged in agriculture (J43) | Poverty reduction (I32) |
| Decline in the share of the labor force engaged in agriculture (J43) | Increase in employment in manufacturing (L69) |
| Decline in the share of the labor force engaged in agriculture (J43) | Increase in employment in services (L89) |
| Higher initial agricultural employment share (J43) | More rapid decline in agricultural employment share (J43) |
| Improved governance (G38) | Decline in agricultural employment share (J43) |