Linking Growth, Employment and Poverty Changes in Cameroon

Abstract

This study reviews the theoretical framework of sectoral decomposition and source decomposition. It isolates the sector-specific and the between-sector effects in accounting for aggregate poverty change in Cameroon using an exact decomposition and accounts for changes in household labour income in terms of labour market performances using a decomposition methodology proposed by Kakwani et al. (2006). During the period 1996-2001, poverty retreated significantly in Cameroon. It significantly contracted in the tertiary and secondary sectors, but the primary sector witnessed a considerable increase in the period under review. Analyses show that the decrease in poverty in the tertiary and secondary sectors is hugely accounted for by the within-sector effects, whereas the increase in poverty among households in the primary sector is largely accounted for by the between-sector effects. These results suggest the importance of ‘earnings mobility’ and ‘job mobility’ as effective strategies to come out of poverty. The massive influx of households into the primary sector from the secondary and tertiary sectors between 1996 and 2001 reflects the importance of the primary sector as a safety net in times of adversity.