Deepening without Broadening? Jobs in Ghana's Private Sector

Creating productive jobs is one of the greatest challenges in Ghana. This paper looks at job creation and its relationship with firm productivity and the quality of jobs among registered firms in the Ghanaian private sector, based on the 2013 World Bank Enterprise Survey. The study looks at the typology of firms in the industry and service sectors, identifying those that have created the most jobs, and the relative quality of these jobs in terms of productivity and firms' average wage bill. Although the formal private sector employs only a tiny share of total employment, the results show that larger and older firms account for the majority of workers, and formal jobs density is highest in Accra (Accra Metropolitan Area and Tema). Large firms also pay higher wages on average, are more productive, and account for most of the aggregate net formal job creation between 2010 and 2012. However, the relationship between size and productivity is positive and statistically significant, mostly driven by the upper part of the firm size distribution, pointing to potential market segmentations as micro, small, and medium firms create fewer jobs and are less productive. Removing barriers to the growth of micro, small, and medium size enterprises, and to the allocation of resources toward more efficient firms should be a key priority for policy makers