Overall, the results indicate that structural change in employment is a key driver of economic growth in African economies.
📌 3 Key Takeaways
🎯
Objective & Hypothesis:This study aims to investigate how structural change in employment affects economic growth for African countries.
📊
Key Findings & Data:It performs linear dynamic panel data estimation, followed by the Sargan and Arellano-Bond tests as post-estimation tools for a panel of 51 African countries, over 1991-2023.
💡
Conclusion & Impact:Overall, the results indicate that structural change in employment is a key driver of economic growth in African economies.
🔬Design:Research Article
📍Scope:2023 Verileri
⚙️Variables:Economic growth · Structural change · Linear Dynamic Panel
Abstract
This study aims to investigate how structural change in employment affects economic growth for African countries. It performs linear dynamic panel data estimation, followed by the Sargan and Arellano-Bond tests as post-estimation tools for a panel of 51 African countries, over 1991-2023. Overall, the results indicate that structural change in employment is a key driver of economic growth in African economies. Accordingly, policymakers should prioritize policies that facilitate the reallocation of labor from low-productivity to high-productivity sectors to maximize the growth benefits.
Gbagbeu, K. S. (2026). LINEAR DYNAMIC PANEL DATA ESTIMATION OF THE EFFECT OF STRUCTURAL CHANGE IN EMPLOYMENT ON ECONOMIC GROWTH. Journal of Research in Economics, Volume: 10 Issue: 2. https://doi.org/10.29228/JORE.58
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58 277–297. https://doi. org/10.2307/2297968
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68, 29–51. https://doi.org/10.1016/0304-4076(94)01642-d
Badiane, O. (2011). Agriculture and Structural Transformation in Africa. Stanford Symposium Series on Global Food Policy and Food Security in the 21st Century. Stanford, CA, USA: Stanford University, Center on Food Security and the Environment.
Berthelemy, J.C., & Soderling, L., (2001). The role of capital accumulation, adjustment and structural change for economic take-off: empirical evidence from African growth episodes. World Development, 29, 323–343. https://doi.org/10.1016/s0305-750x(00)00095-4
Blundell, R. W., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87, 115–143. https://doi.org/10.1016/s0304-4076(98)00009-8
Carmignani, F., & Mandeville, T. (2014). Never Been Industrialized: A tale of African Structural Change. Structural Change and Economic Dynamics, 31, 124–137. https://doi.org/10.1016/j. strueco.2014.09.002
Caselli, F., & Coleman II, W. J. (2001). The US structural transformation and regional convergence: a reinterpretation. Journal of Political Economy, 109(3), 584–616. https://doi.org/10.1086/321015
Cypher, J. M., & Dietz, J. L. (2002). The process of economic development, Routledge. https://doi. org/10.4324/978.020.3070772
de Vries, G., Timmer, M., & de Vries, K. (2015). Structural transformation in Africa: static gains, dynamic losses. Journal of Development Studies 51(6), 674–688. https://doi.org/10.1080/00220.388.2014.997 222
Dietrich, A. (2012). Does growth cause structural change, or is it the other way around? A dynamic panel data analysis for seven OECD countries. Empirical Economics, 43(3), 915–944. https://doi. org/10.1007/s00181.011.0510-z
Fagerberg, J., (2000). Technological progress, structural change and productivity growth: a comparative study. Structural Change and Economic Dynamics, 11(4), 393–411. https://doi.org/10.1016/s0954- 349x(00)00025-4
Fei, J. C. H., & Ranis, G. (1964). Development of the Labor Surplus Economy: Theory and Policy, Homewood, IL: Richard A. Irwin, Inc.
Havlik, P. (2015). Patterns of Structural Change in the New EU Member States, DANUBE: Law and Economics Review, 6(3), 133–157. https://doi.org/10.1515/danb-2015-0009
Herrendorf, B., Rogerson, R., & Valentinyi, A. (2014). Growth and Structural Transformation. In Aghion, P., Durlauf, S. N. (eds) Handbook of Economic Growth, Paris: Elsevier B.V. https://doi.org/10.1016/ b978-0-444-53540-5.00006-9
Kuusk, A., Staehr, K., & Varblane, U. (2016). Sectoral change and labour productivity growth during boom, bust and recovery in Central and Eastern Europe. Economic Change and Restructuring, 50(1), 21–43. https://doi.org/10.1007/s10644.016.9180-3.
Mallick, J. (2015). Globalisation, Structural Change and Labour Productivity Growth in BRICS Economy. FIW Working Paper, 141, FIW – Research Centre International Economics, Vienna.
Mankiw, N. G., Romer, D. & Weil, D. N. (1992) A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 107, 407-437. https://doi.org/10.2307/2118477
Marouani, M. A., & Mouelhi, R. (2016). Contribution of Structural Change to Productivity Growth: Evidence from Tunisia. Journal of African Economies, 25(1), 110–132. https://doi.org/10.1093/jae/ejv016
Martins, P. M. G. (2018). Structural change: Pace, patterns and determinants. Review of Development Economics, 00, 1–32. https://doi.org/10.1111/rode.12555
McMillan, M., & Harttgen, K. (2014). What is Driving the African Growth Miracle? Working Paper Series N° 209, African Development Bank, Tunis, Tunisia.
McMillan, M., & Rodrik, D. (2011). Globalization, Structural Change, and Productivity Growth. NBER Working Paper 17143. https://doi.org/10.3386/w17143
McMillan, M., Rodrik, D., & Verduzco-Gallo, Í. (2014). Globalization, structural change, and productivity growth: with an update on Africa. World Development, 63, 11–32. https://doi.org/10.1016/j. worlddev.2013.10.012
Mensah, E., Owusu, S., Foster-McGregor, N., & Szirmai, A. (2023). Structural change, productivity growth and labour market turbulence in Sub-Saharan Africa. Journal of African Economies, 32(3), 175–208. https://doi.org/10.1093/jae/ejac010
Oulton, N. (2001). Must the growth rate decline? Baumol’s unbalanced growth revisited. Oxford Economic Papers, 53, 605–627. https://doi.org/10.1093/oep/53.4.605
Poirson, H. (2001). The impact of intersectoral labour reallocation on economic growth. Journal of African Economies, 10, 37–63. https://doi.org/10.1093/jae/10.1.37
Ranis, G., & Fei, J. C. H. (1961). A Theory of Economic Development. American Economic Review, 51(4), 533–565.
Sargan, J. D. (1958). The Estimation of Economic Relationships Using Instrumental Variables. Econometrica, 26(3), 393–415. https://doi.org/10.2307/1907619
Sargan, J. D. (1959). The Estimation of Relationships With Autocorrelated Residuals by the Use of Instrumental Variables. Journal of the Royal Statistical Societ, 21(1), 91–105. https://doi. org/10.1111/j.2517-6161.1959.tb00317.x
Silva, E. G., & Teixeira, A. A. C. (2008). Surveying Structural Change: Seminal Contributions and a Bibliometric Account. Structural Change and Economic Dynamics, 19, 273–300. https://doi. org/10.1016/j.strueco.2008.02.001
Stamer, M. (1997). Interrelations Between Subsidies, Structural Change and Economic Growth in Germany: A Vector Autoregressive Analysis. Kiel, Germany: Kiel Institute of World Economics.
Teixeira, A. A. C., & Queirós, A. S. S. (2016). Economic growth, human capital and structural change: A dynamic panel data analysis. Research Policy, 45(8), 1636–1648. https://doi.org/10.1016/j. respol.2016.04.006
Tiako, I. (2024). Is Structural Transformation Generate Economic Growth in Sub-Saharan Africa? Theoretical Economics Letters, 14, 761–784. https://doi.org/10.4236/tel.2024.143040
Timmer, M. P., & de Vries, G. J. (2009). Structural change and growth accelerations in Asia and Latin America: a new sectoral data set. Cliometrica, 3(2), 165–190. https://doi.org/10.1007/s11698.008.0029-5
Vu, K. M. (2017). Structural change and economic growth: Empirical evidence and policy insights from Asian economies. Structural Change and Economic Dynamics, (41) 64–77. https://doi.org/10.1016/j. strueco.2017.04.002
Zulkhibri, M., Naiya, I., & Ghazal, R. (2015). Structural change and economic growth in selected emerging economies. International Journal of Development Issues, 14(2), 98–116. https://doi.org/10.1108/ijdi- 09-2014-0064