Employment increases economic growth; promotes political and social stability; positively affects progress toward the Millennium Development Goals (MDGs) and poverty reduction generally. It also leads to greater social equality and more efficient resource allocation; increased productive potential; and low dependency ratio.

In 2011, the male employment-to-population ratio, globally, was estimated at about 72.7% compared to a female employment-to-population ratio of only 47.9%. For Africa as a whole, the male employment-to-population ratio was estimated at about 69.2% compared to a female employment-to-population ratio of only 39.2%. While estimates for Sub-Saharan Africa stood at 70.4% (male) to 58.8% (female), the gender gap was more pronounced in North Africa.

Added to this, women in North Africa faced an employment rate of only 19.6% (compared to the global average of 47.9%), the second lowest of all regions and sub-regions in the world – and against a figure of 68% for the men in the sub-region during the same year.

In order to better understand the variables which impact and influence employment on the African continent, the following issues need to be explored in greater detail;

Globalization

Trade openness is negative in sign and statistically significant in the Sub-Saharan African estimation but it is positive and statistically at the 1% level in the North African case. The North African results support the view that increasing levels of exports relative to imports may increase employment and that an external market orientation may further enhance job opportunities for. This suggests that labor-intensive export sectors dominate the capital-intensive sectors in North Africa, while the opposite is likely to be the case in Sub-Saharan Africa.

Conversely, the FDI–GDP ratio was found to have a positive but insignificant effect on employment in both the all-African and Sub-Saharan African estimations. However, it has a negative but statistically significant effect on male employment in North Africa.

Education

The education variable has a positive and statistically significant effect on employment in the all-African, Sub-Saharan African, and North African estimations. This supports the hypothesis that education tends to broaden one’s awareness of cultures and social norms that exist in industrial countries where both men and women are in most circumstances entitled to the same freedoms and opportunities.

Demographic factors

Increasing urbanization rates are found to be negatively and highly significantly associated with falling employment in the all-African and Sub-Saharan African estimations. Furthermore, data suggest that rising population growth rates have a negative but statistically insignificant effect on employment.

Sub-regional and oil effects

The sub-regional fixed effects, which shift the intercepts, imply that Southern African countries, followed by those in East Africa, have lower employment compared to Central and West Africa. Data also indicates that net oil-exporting countries generally have systematically lesser employment compared to net oil-importing countries in Africa. This suggests that, holding other factors constant, net oil-exporting countries experience lower levels of employment than net oil-importing countries. In this sense, this suggests that oil-exporting nations have failed to fully utilize their huge oil revenues to create adequate jobs for their citizens.