Unemployment in Africa: How appropriate is the global definition and measurement for policy purpose

Abstract

Purpose: – The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African countries including Ghana. This phenomenon tends to put many jobless adults into the discouraged worker category thereby giving a misleading picture about the unemployment situation in these countries. In addition, the structure of the labour market in many African countries is such that informality takes the face of unemployment. Design/methodology/approach: – The paper uses a scatter plot and simple correlation analysis to show a trade-off between informality or vulnerability of employment and unemployment rates in Africa. The paper also adopts descriptive approach based on simple diagrams to show the extent of discouraged worker effect on the phenomenon of unemployment. Findings: – The paper finds a significantly negative correlation between unemployment and informality in Africa. Beside the high level of informality that hides the face of unemployment, the exclusion of many discouraged workers in estimating unemployment underrates the seriousness of the phenomenon. The paper therefore recommends the adoption of a broader definition of unemployment that accounts for discourage workers and underemployment to show the true picture of labour market challenge in Africa. Additionally, targeted programmes to support and transform the informal sector is required to make it a more attractive means of employment rather than being seen as a refuge point for the unemployed in Africa. Originality/value: – The observation that unemployment should be looked at from a broader perspective that accounts for discourage workers to inform policy design forms a base of the paper’s contribution to the body of literature. In addition, the high level of informality that hides the problem of unemployment shows that labour market challenges should not be restricted to unemployment but low quality of employment that characterises informality as well.