TITLE:
Employment-Growth Nexus within the East African States
AUTHORS:
Peter Ainomugisha, Dickson Turyareeba, Robert Ndyanabo Mbabazize, Vincent Katutsi, Alex Atwine
KEYWORDS:
Employment Intensity of Economic Growth, ARDL Bounds Testing, East Africa
JOURNAL NAME:
Modern Economy,
Vol.11 No.11,
November
24,
2020
ABSTRACT: This paper examines the causal link between economic growth and
employment growth in the three traditional East African countries. Time series
quarterly data for the period 2001-2018 are used to study the underlying
linkage. The study employs the ARDL bounds testing approach to cointegration to
estimate the short run and the long run national employment elasticities of
economic growth. Estimates show that there is no long run causal link between
economic growth and employment growth for Uganda and Tanzania, but there is along run
causal link between the two variables for Kenya. Estimates further show that
there is no short run causal link between economic growth and employment growth
for Uganda and Kenya but there is a short run causal link between the two
variables for Tanzania. In all
countries, estimates indicate that the employment intensity of economic
growth is less than unity suggesting that the economic growth in the three traditional East African countries has not
been employment intensive. The study results provide empirical evidence
of the inability of economy expansion of the East African economies to create
substantial opportunities for employment for the East African labour force.
Results suggest that East African governments need to design policies and
implement projects and programs that are pro-poor and are growth inclusive in
order for the economy expansion to create more opportunities for job creation.