Ghana’s single spine pay policy and unemployment: The application of the partial least square modelling approach

Abstract

The paper investigated the nexus between Ghana's single spine pay policy and unemployment. An exploratory sequential mixed design method was employed to collect data from 413 business owners and managers, which comprised manufacturing companies, service industries, wholesalers as well as small and medium-sized enterprises. The Statistical Package for Social Sciences (SPSS) 24.0 as well as the structural equation modelling (SEM) statistical technique with PLS 3.0 was used to determine the hypothesized relationships. It was observed that single spine pay policy had a significant effect on unemployment. The policy had a very high influence on cyclical unemployment, followed by frictional unemployment as well as the structural unemployment in that order. It basically uncovered evidence that the introduction of the policy contributed to the unemployment situation in the country. The study contributes to the ongoing research in examining the linkage between single spine pay policy and unemployment. It also adds to the existing literature on the measurement of unemployment as a "multidimensional construct" instead of the conventional "unidimensional construct" measurement. The strategic implication of the result is discussed in the paper.