Service Sector: The Source of Output and Employment Growth in Ethiopia
Journal Title: Academic Journal of Economic Studies - Year 2016, Vol 2, Issue 4
Abstract
According to official data, the Ethiopian economy has grown at 10.9% on average in 2004/05-2014/15. During this period a structural change is observed as agriculture declined in its share and service sector dominates the economy. Hence, in this study we used a Shapely decomposition method to identify the service sector contributions to per capita GDP and employment growth during two periods of (1999-2005) and (2005-2013). Per capita GDP was decomposed into employment rate, productivity, and demographic changes. The result shows that during (1999-2005) growth periods, Ethiopian per capita GDP growth was mainly contributed by employment rate changes originated from the agriculture sector. Whereas the service sector has the highest contribution in productivity but a negative contribution in employment change. However, during the high growth period of (2005-2013) the growth in per capita GDP is due to productivity growth which emanates from the service sectors specifically from the distributive service sector.
Authors and Affiliations
Zelalem Ejigu Kabeta, Inderjeet Singh Sidhu
Keywords
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