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Is Small Beautiful? Small Enterprise, Aid and Employment in Africa
Author(s) -
Page John,
Söderbom Måns
Publication year - 2015
Publication title -
african development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.654
H-Index - 32
eISSN - 1467-8268
pISSN - 1017-6772
DOI - 10.1111/1467-8268.12138
Subject(s) - investment (military) , business , labour economics , job creation , panel data , small business , economics , marketing , politics , political science , law , econometrics
Aid providers often describe small firms as ‘job creators’. But what types of jobs do they create? Drawing on enterprise survey data for nine African countries and panel data for Ethiopia we find that small and large formal sector firms create similar numbers of net jobs. Small firms, however, have much higher turnover of employment and pay persistently lower wages. To create more ‘good’ jobs aid should target the constraints to the growth of firms of all sizes. Improving the ‘investment climate’ and new programs to increase firms' capabilities—through, for example, management training—offer greater prospects for employment creation.