Abstract
Empirical evidence on the link between trade and employment outcomes in Africa is severely limited. The paper analyses employment outcomes, that is, the rise in casual employment in Kenya’s manufacturing sector in relation to firms’ export orientation. While exporting firms generally account for a higher proportion of employment in the manufacturing sector, the proportion of workers in exporting firms declined by over 20% between the early 1990s and 2003. On the other hand, the proportion of casual workers employed in manufacturing firms increased over the same period. However, the empirical results show no strong evidence of “exporting” significantly influencing the proportion of casual workers employed by firms. The combination of an increasingly skilled labour force in Kenya and deepening casualisation among workers points to a conundrum that requires further analysis. That notwithstanding, the results suggest a need for policy focus not only on job creation, but also on the quality of jobs created.
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Notes
For a detailed description of trade liberalization reforms in Kenya, see Were et al. (2006)
In the literature, the words precarious, non-standard, flexible forms of employment are used interchangeably in reference to irregular, part-time, casual, seasonal workers.
Numerical flexibility is the ability of firms to change the number of people they employ by making use of part-time, temporary and seasonal employees (whose contracts can be terminated using liberal provisions on hiring and dismissals), and short-fixed term contracts, freelance work, homework or outwork (Michie and Sheehan 2003).
Another way of capturing the impact of exporting would have been to use export-output ratio but this variable was not available for all the data sets used.
It would have been ideal to specify the empirical equation using the wage of casual workers relative to the total wage but since data on wages were not disaggregated by type of employee (i.e. casual versus regular), Eq. 7 was estimated using average firm wage (i.e. firms’ total wage bill divided by total employment).
For a detailed description of the Kenyan RPED data for the 1990s, see Aguilar and Bigsten (2002). The RPED survey data have extensively been used by other researchers to study different aspects of firm behaviour, e.g. firm growth, credit access and productivity, among others.
For ease of comparison where necessary, these were re-classified under the four sectors (food, wood, textile and metal and chemicals) plus the additional one; paper, printing and publishing. This classification matches that used in the earlier surveys as much as possible.
Casual workers are those employed for a period of 3 months or less. Part time workers work under similar conditions as casual workers but for relatively shorter periods. In both cases, payment is often at end of day or week or piece rate. Additionally, the proportion of employees classified as part time workers was negligible and hence, they were simply classified as casual workers in the analysis.
This question was asked only in reference to regular workers and therefore excludes casual workers.
This question was only asked in reference to regular or permanent workers and not in reference to casual workers.
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Acknowledgements
I am deeply indebted to Prof. Steve Kayizzi-Mugerwa for his elaborate comments on earlier versions of this paper. I am also grateful to Dr. Eliab Luvanda, Dr. Anthony Wambugu, Dr. Damiano K. Manda and Prof. Ann Veiderpass for their helpful and insightful comments. I take responsibility for errors and shortcomings. I acknowledge financial support given by African Economic Research Consortium towards my PhD dissertation which formed the basis of this paper. The views expressed in the paper are those of the author and should not be misconstrued to be those of Central Bank of Kenya. My acknowledgement of comments from the anonymous referees. I take responsibility for any errors and omissions.
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Were, M. Is There a Link Between Casual Employment and Export-Orientation of Firms? The Case of Kenya’s Manufacturing Sector. Rev Black Polit Econ 38, 227–242 (2011). https://doi.org/10.1007/s12114-011-9099-x
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DOI: https://doi.org/10.1007/s12114-011-9099-x