Selection into Employment Sectors in Urban Ghana and Tanzania: The Role of Education

Abstract

Recent debate among policy makers and researcher has centered on whether informal sector employment is a result of competitive market factors or labour market segmentation. This study contributes to the empirical literature by analysing selection into employment sectors in urban labour markets of Ghana and Tanzania using worker surveys from 2004 to 2006 in pooled sample models. Results from occupational choice models suggest both labour markets are characteristic of preference for formal sector employment with education. Results based on age differences indicate heterogeneity in job attainment as young people are found to face more challenges in accessing jobs.