Job quality in the micro and small enterprise sector in Ethiopia: Evidence from firm-level data

Abstract

Micro and small enterprises are ubiquitous in developing countries and play a central role in employment. While there is solid empirical evidence that micro and small enterprises are important drivers of job creation, there is limited evidence on the quality aspects of employment in this sector, particularly in developing countries. Much of the previous research has focused primarily on quantitative job creation. Some studies have investigated job quality using labor force survey data at the employee-level. However, these studies hardly examined the role of entrepreneurial and firm characteristics on job quality. Firms and entrepreneurs in the micro and small business sector are natural targets of policy initiatives to improve job quality. Cognizant of this, this research aims to examine the determinants of job quality in the micro and small business sector in Ethiopia. Using a large firm-level primary dataset collected in the 10 largest cities in Ethiopia, the paper examines the relationship between entrepreneurial characteristics and indicators of job quality. Our regression results show the existence of a positive and significant correlation between job quality, as measured by average wages and job security and safety indicators, and entrepreneurial education and experience, as well as firm size and the presence of a professionally recruited manager. Our findings offer some important implications for policymakers to improve job quality by identifying the entrepreneurial and firm characteristics that drive or constrain quality job creation in the formal micro and small business economy in urban contexts.

Keywords:

• job quality
• entrepreneur
• Ethiopia
• manufacturing
• MSE

JEL codes:

• J01
• J33
• J81

Acknowledgements

We would like to acknowledge the technical help, including editorial works, we received from the Ethiopian Development Research Institute.

Authors contribution

I declare that this manuscript is original, has not been published before and is not currently being considered for publication elsewhere. As a corresponding Author, I confirm that I have read and approved the manuscript.

Disclosure statement

We are not aware of any conflicts of interest related to this publication. The limited financial support we received from the IDRC for this work cannot have influenced the result.

Consent for publication

The authors confirm that human research participants provided informed consent for publication of the research report in a journal publication.

Availability of data and materials

The datasets generated during and/or analyzed during this study are available from the corresponding author upon reasonable request.

Code availability (software application or custom code)

The do-files for the results generated during this study are available from the corresponding author upon reasonable request.

Ethical approval and consent to participate

All procedures performed in studies involving human participants were in accordance with the ethical standards of our research institute and the national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards. We also confirm that we obtained informed consent from all individual participants included in the study.

Notes

1. According to the ILO (2013), decent work involves opportunities for work that is productive and delivers a fair income, security in the workplace and better prospects for personal development and social integration.

Additional information

Funding

We received financial support for the research from the International Development Research Center (IDRC). The financial support was used to conduct a survey, which serves as the main data source for this research.