Productive transformation, employment and education in Tanzania - - PowerPoint PPT Presentation

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Theo Sparreboom Employment Trends International Labour Organization Geneva, Switzerland

Productive transformation, employment and education in Tanzania

Learning to Compete: Industrial Development and Policy in Africa 2013 UNU – WIDER Development Conference Helsinki, 24-25 June

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Overview

• Economic and labour market context in sub-Saharan

Africa

• Growth and structural change in Tanzania
• Structural change and education
• Education intensity framework: decomposition
• Structural change and job quality
• Rate of return and qualifications mismatch analysis
• Conclusions
• Educational advance barely keeps up with structural change
• Limited productive transformation translates into demand for

secondary education

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2.3 5.5 3.4 8.0 2.3 2.2 1.6 3.9 0.9 0.9

1 2 3 4 5 6 7 8 9 10 20 30 40 50 60 70 80

Sub-Saharan Africa South Asia South East Asia and the Pacific East Asia North Africa World Latin America & the Caribbean Central and South Eastern Europe (non-EU) and CIS Middle East Developed Economies and European Union

Productivity growth rate (%) Output-per-worker ('000 constant 2005 international US $)

Productivity level 2012 Productivity growth rate 2000-2012

Labour productivity levels and average annual growth rates, by region

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Source: Global Employment Trends 2013: Recovering from a second jobs dip (Geneva, ILO, January 2013)

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Vulnerable employment in sub-Saharan Africa

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Source: Global Employment Trends 2013: Recovering from a second jobs dip (Geneva, ILO, January 2013)

75 77 79 81 83 85 50 100 150 200 250 300 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Vulnerable employment rate (percentage) Vulnerable employment (millions) Vulnerable employment Vulnerable employment rate

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• Economic growth averaged 7.2 per cent annually from

2001 to 2006

• Productivity growth averaged 3.3 per cent in this period
• Vulnerable employment rate decreased by only 2.6

percentage points

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Economic growth and structural change in Tanzania

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• 5

5 10 15 20 Agriculture Industry Services National

Value added Employment Productivity

Average annual growth of value added, employment and productivity by broad economic sector, 2001-06 (%)

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Distribution of employment by broad sector (%) Education intensity by broad sector (share of workers with at least lower secondary education, %)

20 40 60 80 100 Agriculture Industry Services Unemployed

2001 2006

5 10 15 20 Agriculture Industry Services Unemployed

2001 2006

Employment and education in 2001 and 2006

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Period Between sector change in education intensity (%) Within sector change in education intensity (%) Education intensity (end of period, %) Share of agriculture in the labour force (end of period, %) GDP per capita (constant 2000 US$; end

• f period)

Tanzania 2001-2006 88.3 11.7 5.9 70.0 392 India 1993-2004 37.3 62.7 21.5 51.3 525 Indonesia 1994-2004 9.6 90.4 45.9 40.5 876 Philippines 1991-2004 29.0 71.0 50.9 33.1 1,153 Thailand 1995-2005 17.0 83.0 36.5 42.0 2,360

Note: education intensity is defined as the proportion of workers with at least secondary education Sources: ADB (2007); Sparreboom and Nübler (2013); World Bank (2012b).

Decomposition of structural change and education intensity

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• Advance in education hardly sufficient to keep up with the pace of structural

change

• But large differences in dynamics within sectors between vulnerable and

non-vulnerable employment segments

• In contrast to the change in education intensity across all workers, education

intensity decreased in non-vulnerable employment at the national level

• Productive transformation within sectors was mostly limited to vulnerable

employment, i.e. the low productivity segment of employment 8

Structural change, job quality and education

1 2 3 4 5 6 7 8 9 Agriculture Manufacturing Services Aggregate

Vulnerable employment

2001 2006

5 10 15 20 25 30 35 Agriculture Industry Services Aggregate

Non-vulnerable employment

2001 2006

Education intensity by broad sector (%)

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Demand for education: wage returns

• Rates of return for education are high in Tanzania, but

slightly declined between 2001 and 2006

• Returns to years of schooling increased strongly in

mining and construction

• Rates of return to secondary education rose sharply
• Decreasing returns for tertiary education reflect:
• Lack of productive transformation within sectors
• Quality of some tertiary qualifications

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5 10 15 20 25

Primary Secondary Tertiary

Rates of return to levels of education (%)

2001 2006

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Skills mismatch: underqualification

Underqualification (%) 2001/02 2004 2006 2008 2010 Europe 36.4 34.5 32.0 31.5 28.6 Philippines 35.9 29.4 Tanzania 93.5 90.7

Sources: ILO (2013b); Sparreboom and Nübler (2013); El Achkar Hilal et al. (2013).

• Skills and qualifications mismatch can be measured based on the

correspondence between the occupational distribution and levels of educational attainment

• Underqualification is widespread in Tanzania, and is decreasing only

slowly

• Mismatch analysis confirms the need for secondary education across

all jobs

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Conclusions

• Educational advance barely keeps up with structural change
• Large differences within economic sectors mask the dynamics of

productive transformation: structural change in non-vulnerable employment is far more limited

• Limited productive transformation translates into demand for

secondary education

• Industrial development policies need to support productive

transformation patterns that create more decent jobs; these policies need to be aligned with education and training policies

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Thank you for your attention