Determinants of choice of economic sector in the non-farm economy in Ghana

Abstract

This paper examines the economic sector choice of individuals in the non-farm economy, using the 2012 Ghana Living Standards Survey (GLSS). The multinomial logit regression results indicate that factors that influence individuals' decisions to participate in the non-farm economy differ for the different sectors -manufacturing, wholesale/retail and services. This research emphasises the heterogeneous nature of choice and entry into various sectors of the non-farm economy in Ghana. From a policy perspective, the findings may signal the various policy measures that policy-makers may adopt in order to increase participation into a targeted sector, and promote long-term growth and development of the country.

Expanding Job Opportunities in Ghana

“…HHEs operating in construction and services generate higher sales and income and pay higher "salaries" than those operating in manufacturing. The services sector appears to be the highest performing sector as measured by asset valuations of enterprises, while the manufacturing sector is the lowest performing sector (Owoo 2015). The median monthly income after deducting enterprise expenses also increases with firm size and age, and varies by gender.…”

“…An analysis (multinomial logit) of factors that influence entry into various economic sectors in the off-farm economy finds that, while men are more likely to enter the manufacturing sector, women appear to dominate the wholesale/retail sectors, indicating the possibility of some gender discrimination in the off-farm economy. Marriage also reduces the likelihood of participation in the services sector, especially among women, but increases likelihood of participation in the wholesale sector, where activities are perceived to be more flexible and women are better able to balance work and domestic responsibilities (Owoo 2015).…”