Youth Unemployment and Earnings in Africa: Evidence from Tanzanian Retrospective Data

Bridges, Sarah; Fox, Louise; Gaggero, Alessio; Owens, Trudy

Abstract

We exploit a unique data set of individual labour market histories in urban Tanzania to estimate the effect of early labour market experiences on adult labour market outcomes. We consider four labour market entry states—wage employment, self-employment, unpaid worker in the family business and unemployed job-seeker—and estimate how final earnings are associated with each entry state. The findings suggest that how individuals enter the labour market does matter for final earnings. We find that an initial period spent in wage employment is associated with an important earnings premium. We interpret this finding as evidence of the entrapment hypothesis, in that, people who enter the labour market in more disadvantaged positions, such as in the household enterprise, either as self-employed or as unpaid family workers, suffer a penalty in their future earnings. These findings persist after controlling for family specific fixed effects.

Citation

Bridges, S., Fox, L., Gaggero, A., & Owens, T. (2017). Youth Unemployment and Earnings in Africa: Evidence from Tanzanian Retrospective Data. Journal of African Economies, 26(2), 119-139. https://doi.org/10.1093/jae/ejw020

• Journal Article Type: Article
• Acceptance Date: Jul 15, 2016
• Online Publication Date: Oct 31, 2016
• Publication Date: Mar 1, 2017
• Deposit Date: Nov 4, 2016
• Publicly Available Date: Nov 1, 2018
• Journal: Journal of African Economies
• Print ISSN: 0963-8024
• Electronic ISSN: 1464-3723
• Publisher: Oxford University Press
• Peer Reviewed: Peer Reviewed
• Volume: 26
• Issue: 2
• Pages: 119-139
• DOI: https://doi.org/10.1093/jae/ejw020
• Keywords: Labour market entry, Youth unemployment, Wage equation
• Public URL: https://nottingham-repository.worktribe.com/output/820263
• Publisher URL: http://dx.doi.org/10.1093/jae/ejw020
• Additional Information: This is a pre-copyedited, author-produced PDF of an article accepted for publication in Journal of African Economies following peer review. The version of record Sarah Bridges, ; Louise Fox, Alessio Gaggero, and Trudy Owens Youth Unemployment and Earnings in Africa: Evidence from Tanzanian Retrospective Data J Afr Econ (2016) ; doi: 10.1093/jae/ejw020 is available online at: http://dx.doi.org/10.1093/jae/ejw020
• Contract Date: Nov 4, 2016