赞比亚企业动态在总生产力和正式就业流动中的作用

The Role of Firm Dynamics in AggregateProductivity and Formal Job Flowsin ZambiaPublic Disclosure Authorized Laban SimbeyeEliya LunguAndreya KumwendaEnda BandaJonathan MsoniRyan Kuo Finance, Competitiveness and Innovation Global PracticeApril 2024 Policy Research Working Paper10756 Abstract Zambia’s private sector must deliver quality jobs at scale tokeep up with its expanding working age population, con-tribute to economic transformation, and reduce poverty.This entails both the creation of high-quality jobs and pro-ductivity improvement among existing jobs and firms. Thispaper analyzes the dynamics of formal firms to identify thedrivers and barriers to productivity, formal employment,and formal wage growth in Zambia. Leveraging firm andworker administrative tax data from Zambia, the paperdecomposes labor productivity and wage growth amongformal firms and workers in Zambia into within-firm,between-firm, inter-sectoral, and dynamic components.The findings show that the aggregate labor productivityof formal firms declined over 2014–21, driven by secu-lar within-firm declines in the non-mining industry and service sectors. By contrast, labor productivity grew inagriculture and remained flat in mining over the sameperiod. Real wage trends for formal workers have mostlymirrored labor productivity dynamics, declining 40-50 per-cent across non-agriculture sectors but growing slightly inagriculture, largely driven by within-firm shifts rather thanbetween-firm or between-sector dynamics. The declines inlabor productivity and wages reflect business environmentchallenges related to access to finance and electricity, aswell as burdensome formal compliance requirements andcompetition with the informal sector. Within-firm laborproductivity challenges also reflect low skills and capacity—including low technology adoption—among both firmsand workers. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. The Role of Firm Dynamics in Aggregate Productivity and Formal Job Flows inZambia Laban Simbeye,◊Eliya Lungu,◊Andreya Kumwenda,◊Enda Banda,◊Jonathan Msoni,◊Ryan Kuo,1 Keywords: Productivity, Formal Jobs, Formal Wages, Structural Transformation JEL Codes: D24, E24, J24, J31, L16 1.Introduction Zambia’s private sector must deliver quality jobs at scale to keep up with the expanding working agepopulation, contribute to economic transformation, and reduce poverty. Based on population growthprojections, Zambia needs to create over 10 million new jobs by 2050 to keep its labor forceparticipation and employment rates from declining. The country’s working age population is projectedto more than double between 2022 and 2050 (Merotto 2017). This growth will provide a demographicdividend if Zambia can drive productivity growth and economic transformation. However, if Zambia’sprivate sector fails to generate enough good jobs to absorb this expansion, economic growth will fail topermeate to the rest of the economy as new working-age Zambians will be unable to access productiveopportunities. This will limit its impact on poverty reduction and increase the risk of upheaval. As well as creating new jobs, Zambia’s private sector needs to make existing jobs more productive. Lowproductivity is limiting Zambia’s potential to diversify its sources of growth and to create quality jobsand firms. While shifts in labor to higher-productivity sectors and within-sector productivityimprovements can contribute to labor productivity growth and higher wages, Zambia’s private sectorhas had limited success in both areas. Lower-productivity sectors such as agriculture (58.7 percent ofemployment) and wholesale and retail trade (14.1 percent) still account for most employment. Existinghigh-productivity sectors tend to generate few jobs. These include financial services (0.5 percent of jobs)and mining, which accounts for only 1.1 percent of jobs despite its role as Zambia’s primary exportdriver. Meanwhile, lower-productivity informal employment accounts for three-quarters of jobs, andwithin-sector productivity has generally been flat (Zambia MLSS 2022, World Bank 2024). It is thus critical to identify the drivers of and barriers to productivity, formal employment, and formalwage growth in Zambia. Leveraging firm and worker administrative tax data from Zambia, this paperdecomposes labor productivity and wage growth among formal