Analysing Economic Growth on Paid Work Growth in Mozambique

Abstract

The central objective of this paper was to understand the contribution of economic growth on job creation (paid work) in Mozambique. This comes at a background when the country experienced a decade of significant economic growth and economic development, but poverty and unemployment remain a problem. The growth of an economy without creating opportunities for the population and especially the poor is undesirable and such situations are described as exclusive economic growth and development. Despite commendable economic growth episodes, an estimated 70% of the Mozambican labour force still work in the agriculture sector and on the other side, the informal economy is projected at around 80% of the economy. To achieve the central objective of the study, the authors estimated the Autoregressive Distributive Lag model (ARDL). Our key findings were that economic growth in Mozambique does have a positive impact on growth of waged and salaried workers (WASW) and the relationship is statistically significant. We also found that growth in infrastructure investment contributes positively to paid work. Lastly, we found that gross value added in the economy negatively impacts paid work. Policy recommendations arising from our findings are that responsible authorities need to embark on massive infrastructure investment since it was found that its growth has positive traction of waged and salaried work growth and economic growth which also contribute to further job creation.