More, and More Productive, Jobs for Nigeria: A Profile of Work and Workers © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Cover design: Samson Lawrence i Table of Contents Abbreviations and Acronyms ......................................................................................................................v Acknowledgments ...........................................................................................................................................vi Overview .................................................................................................................................................vii 1 Why Are Jobs Important In Nigeria? .................................................................................................1 2 High Growth But High Poverty ...........................................................................................................7 3 What Jobs Do Nigerians Do? .............................................................................................................12 What do jobs look like in Nigeria? ..............................................................................................................13 Employment is slowly shifting away from agriculture ..........................................................................16 Job transitions are not improving fast enough to help reduce poverty .........................................18 Jobless people are a heterogeneous group ..............................................................................................21 Work across the three main domains: farms, household enterprises, and wage jobs ...............22 4 Moving Into Productive Work ..........................................................................................................26 School-to-work transitions are slow and incomplete ...........................................................................27 Transition to productive employment is delayed by too-early entry, slow progress in school, and early family formation ............................................................................28 Child labor in Nigeria—an international comparison ...........................................................................29 Short-term job mobility ...................................................................................................................................32 Employment conditional upon father’s sector of employment, ages 15–64 ..................................32 Moving for work: patterns of migration .....................................................................................................34 Helping the transition into better jobs: the role of skills .......................................................................35 5 Fostering Jobs That Are Good For Development ...................................................................40 Many jobs are needed… .................................................................................................................................42 … in urban and rural areas … ........................................................................................................................44 … and mostly in agriculture and nonfarm household enterprises ....................................................46 Fostering jobs across sectors ........................................................................................................................46 Building skills for the labor market ...............................................................................................................53 Reducing income volatility over the short term .......................................................................................54 Improving data for policy making .................................................................................................................56 References .............................................................................................................................................57 Figures Figure 1: Lack of jobs is a pressing concern for Nigerians ....................................................................viii Figure 2: Population pyramids, world and Nigeria, 1990 and 2010 ..................................................ix Figure 3: Many work, but in low-productivity jobs ................................................................................xi Figure 4: More people are entering employment and shifting slowly out of subsistence farming into wage jobs .................................................................................................xii ii Figure 5: Employment is still concentrated in low-productivity activities, especially in northern regions .......................................................................................................................xiii Figure 6: The poor work as much as the nonpoor, but in less well-paying occupations ...........xiv Figure 7: Unemployment and inactivity affect different groups .........................................................xv Figure 8: Transition from school to work is incomplete, especially for women .............................xvi Figure 9: Girls leave school to marry earlier and do not enter working life ...................................xvii Figure 10: Seasonal labor market mobility (post-planting and post-harvest), 2012/2013 xvii Figure 11: Labor market mobility, 2010/2011 to 2012/2013 ...................................................................xviii Figure 12: Access to higher education is uneven, and most educated workers are in the public sector .....................................................................................................................xix Figure 13: Child and youth populations are growing fast, placing pressure on job markets ....................................................................................................................................xx Figure 14: Urban areas, especially larger cities, will account for a large share of the population ....................................................................................................................................xxi Figure 15: Labor supply is not a major problem for firms, but labor costs are high relative to productivity ....................................................................................................................xxii Figure 1.1: Unemployment and job creation are pressing concerns for Nigerians ......................4 Figure 2.1: Composition of Nigeria's GDP, using rebased numbers, 2013 ..........................................8 Figure 2.2: Population pyramids, World and Nigeria, 1990 and 2010 ..............................................9 Figure 3.1: Distribution of Nigeria’s working-age population, millions ............................................14 Figure 3.2: More people are entering employment and shifting slowly out of subsistence farming into wage jobs .................................................................................................16 Figure 3.3: Young women and those with some education have moved into agriculture and wage work ......................................................................................................................17 Figure 3.4: Employment is still concentrated in low-productivity activities ...................................18 Figure 3.5: Better employment opportunities are concentrated in the south, particularly in South West .................................................................................................................................19 Figure 3.6: Households and individuals have to diversify their sources of income .....................19 Figure 3.7: The poor work as much as the nonpoor, but in less well-paying sectors and occupations ...................................................................................................................................20 Figure 3.8: Wages vary significantly by sector .........................................................................................20 Figure 3.9: Unemployment and inactivity affect different groups ......................................................21 Figure 3.10: Firms in Nigeria are young and small on average ..........................................................23 Figure 3.11: Informality is high, even among wage workers ................................................................24 Figure 4.1: Transition from school to work is incomplete, especially for women .........................28 Figure 4.2: Girls leave school to marry earlier and often do not enter into working life ............30 Figure 4.3: Seasonal labor market mobility (post-planting and post-harvest), 2012/2013 ........33 Figure 4.4: Labor market mobility 2010/2011 and 2012/2013 ..............................................................34 iii Figure 4.5: International migration is increasing and the share of educated migrants is on the rise ......................................................................................................................................35 Figure 4.6: Education levels have increased, but many youth still have no post-primary education ...................................................................................................................36 Figure 4.7: Illiteracy rates after completing primary school ..................................................................37 Figure 4.8: Workers with higher levels of education find public employment ...............................38 Figure 5.1: Nigeria’s fertility rates are and will remain high by any standard ..................................42 Figure 5.2: Working-age population growth implies that many new jobs will need to be created ....................................................................................................................................43 Figure 5.3: Nigeria is urbanizing rapidly, but the economy needs to modernize faster .............44 Figure 5.4: Urban areas, especially larger cities, will account for a large share of the population ....................................................................................................................................45 Figure 5.5: Percentage of Nigerian firms identifying electricity, finance, skill levels, and labor regulations as major constraints, by firm characteristics ..............................47 Figure 5.6: Labor costs are not competitive given low productivity in most firms’ production .....................................................................................................................................48 Tables Table 2.1: Human capital and the MDGs—Nigeria and African peers ..............................................11 Table 3.1: Access to jobs differs across groups ..........................................................................................15 Table 4.1: Intergenerational mobility is limited ...........................................................................................32 Boxes Box 1: Nigeria’s job challenges in numbers ................................................................................................viii Box 1.1: Nigeria’s job challenges in numbers ..............................................................................................2 Box 1.2: Jobs drive development—the World Development Report 2013 ........................................3 Box 1.3: What is a job in Nigeria? ...................................................................................................................6 Box 3.1: Data for analyzing labor and jobs .................................................................................................13 Box 3.2: What is informality? .........................................................................................................................25 Box 4.1: Many children in Nigeria work .......................................................................................................29 Box 4.2. Does the legal system empower women in Nigeria? ...........................................................31 Box 4.3: Skills development in Nigeria’s informal sector ........................................................................39 Box 4.4: The National Youth Service Corps in Nigeria ...........................................................................39 Box 5.1. Do Nigeria’s Labor Laws Matter? .................................................................................................47 Box 5.2: Leveraging ICT for job creation ...................................................................................................49 Box 5.3: Natural resources and jobs—avoiding the Dutch Disease ...................................................50 Box 5.4: What is known about the effectiveness of support for self-employment in developing countries? ...........................................................................................52 Box 5.5: What role can public works programs play in jobs and employability in Nigeria? .......55 iv Abbreviations and Acronyms FAO Food and Agriculture Organization GDP Gross Domestic Product GHS General Household Survey ICT Information and Communications Technology ILO International Labour Organization MDG Millennium Development Goal MICS Multiple Indicator Cluster Survey NBS National Bureau of Statistics NDE National Directorate of Employment NYSC National Youth Service Corps OECD Organisation for Economic Co-operation and Development SCPZ Staple Crop Processing Zone SME Small and Medium Enterprises SMS Short Message Service SMEDAN Small and Medium Enterprises Development Agency of Nigeria UNESCO United Nations Educational, Scientific, and Cultural Organization UNICEF United Nations Children’s Fund v Acknowledgments More, and More Productive, Jobs for Nigeria: A Profile of Work and Workers has been prepared by a World Bank team consisting of Kathleen Beegle, Dena Ringold, and Sara Johansson de Silva. This report was prepared as part of a joint program on poverty and jobs led by the Social Protection and Labor and Poverty Global Practices. Iyioluwa Teleola Akinlawon, Robert Pickmans, and Amarachi Utah provided research assistance for the analysis of household survey data. Rose Mungai assisted with access to household data. Invaluable input was supplied by Johanne Buba and Michael Wong (private sector development), Marta Favara (skills and education), Nancy Lozano Gracia (urbanization), Vasco Molini (poverty analysis), Gbemisola Oseni (rural livelihoods), Sangeeta Raja (demographics), Neil Shah (information and communications technology and jobs), and El Hadj Adama Toure (agricultural production). The team is much indebted to Dennis Zulu, ILO Deputy Director, Nigeria Office, for providing a review of current labor laws in Nigeria; and to Amarachi Utah for background notes on public works and informality. The report was prepared under the overall guidance of Stefano Paternostro, Practice Manager for Social Protection and Labor, and Marie-Françoise Marie- Nelly, Country Director for Nigeria. Indira Konjhodzic, Country Program Coordinator for Nigeria, provided guidance and support throughout. The report benefitted greatly from comments, suggestions, and input provided at various stages, including from its peer reviewers David Newhouse, Nithin Umapathi, and Mattias Lundberg, as well as from Katherine Bain, Lucy Fye, John Giles, Austin Kilroy, John Litwack, Roland Lomme, Dino Merotto, Khwima Nthara, Foluso Okunmadewa, and other members of the Nigeria Country Team. The report was edited by Amanda Green. vi Overview vii Overview Jobs matter in Nigeria families. Two Nigerias are emerging: one in Jobs are critical for Nigeria’s present and which high and diversified growth provides future, as better jobs and income-earning more (albeit not enough) job and income opportunities form the basis for more opportunities, and one in which workers diversified economic growth, poverty are trapped in traditional low-productivity, reduction, and greater prosperity. Some 40 subsistence activities. High growth in the to 50 million additional jobs will be needed working-age population, low skill levels, to employ Nigeria’s population between 2010 and the marginalization of some groups— and 2030. In order to reduce poverty and particularly women—from job opportunities help create more inclusive growth, those jobs present additional challenges to creating need to be more productive and provide enough good jobs for the many new entrants higher incomes than is currently the case. to the labor market each year (Box 1). Jobs are a central issue in the public This report provides an overview of jobs, debate in Nigeria. When asked to rank workers, and employment opportunities the main problems facing the country, in Nigeria, using recent household data. Nigerians cite unemployment as the most In more developed countries, having a job important challenge—well above poverty is often understood as receiving a wage, (Figure 1). Unemployment, as defined by enjoying a minimum standard of living, and the International Labour Organization (ILO) having some access to social security. In and in this report, is not high. Worries over unemployment can be understood to Box 1: Nigeria’s job challenges in numbers reflect concerns about a lack of real earning opportunities, which in turn affect living In 2011: standards, economic development, and social 53 million Nigerians between the ages of 15 and cohesion in Nigeria. 64 were working Half of them were working in low-productivity Figure 1: Lack of jobs is a pressing concern for Nigerians agriculture Percentage of youth and adult workers considering specific 14 million workers belonged to the poorest 40 area the most pressing problem percent of the population; their jobs do not pay 30 enough to escape poverty % defining issue as most pressing problem Unemployment is the most pressing problem in Nigeria 28 million adult workers, including 5 million young workers between the ages of 15 and 24, 25 20 had less than a primary education 15 17 million women were not working or studying 10 8 million young people between 15-24 years of 5 age were not working or studying Source: Estimates based on GHS 2011. 0 Ages 15 -24 Ages 25 and above Source: Estimates based on Afrobarometer 2013. Nigeria, most employed individuals work for themselves or their families, in or close to The inadequacy of job opportunities is at home, and with informal working conditions. the core of high poverty levels, regional Some work multiple jobs, and many of them inequality, and social and political unrest do not earn enough to escape poverty even in Nigeria. Comparatively high and stable though they work. A broader perspective economic growth in recent years has not recognizing the complexities of jobs and made a strong dent in poverty, largely labor in Nigeria is needed to understand because it has not resulted in a diversification the nature of work and its implications for of the sources of labor income for poor individuals and households. viii The diagnostics included in this report are Nigeria to be a middle-income country and intended to describe the landscape of jobs the largest economy in Africa. Although in the country and provide broad analysis agriculture and mining together account for as an input into the development of a jobs 40 percent of GDP, the Nigerian economy strategy for Nigeria. Such a strategy would today is relatively diversified, with “modern” lay out more specific policy priorities across sectors in industries and services leading sectors to promote job creation and raise economic growth. Yet, according to the productivity. latest World Bank estimates, one-third of Nigerians live in poverty. High population Growth is not mirrored in growth, polarized growth patterns, and lack sufficient poverty reduction of employment diversification have prevented In spite of its significant economic power, economic growth from reducing poverty. Nigeria suffers from relatively high levels Welfare effects from economic growth of poverty. Nigeria has benefited in the past are diluted by high population growth. decade from economic and political reforms, Nigeria’s population pyramid remains prudent macroeconomic management, and dominated by children and youth (Figure a return to political pluralism. A rebasing 2), owing to rapid population growth rates of national accounts data in 2014 showed Figure 2: Population pyramids, world and Nigeria, 1990 and 2010 Percentage of youth and adult workers considering specific area the most pressing problem a. World, 1990 b. Nigeria, 1990 80+ 80+ 75-79 75-79 70-74 70-74 65-69 65-69 60-64 60-64 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 15-19 20-24 15-19 10-14 5-9 10-14 0-4 5-9 0-4 -20 -10 0 10 20 -20 -10 0 10 20 Female Male Female Male c. World, 2010 d. Nigeria, 2010 80+ 80+ 75 -79 75-79 70 -74 70-74 65 -69 65-69 60 -64 60-64 55 -59 55-59 50 -54 50-54 45 -49 45-49 40 -44 40-44 35 -39 35-39 30 -34 30-34 25 -29 25-29 20 -24 20-24 15 -19 15-19 10 -14 10-14 5 -9 5-9 0 -4 0-4 -20 -10 0 10 20 -20 -10 0 10 20 Female Male Female Male Source: United Nations 2013. ix now and in the past. As such, Nigeria’s Slow progress in poverty reduction in population growth pattern has not yielded rural areas is linked to slow structural the “demographic dividend” witnessed in transformation in the agricultural sector, other countries, where a bulge in the number which remains the single most important of working-age adults—but not in the next source of jobs and income in Nigeria. generation—implies more workers to support Agricultural growth (averaging just over 2 young dependents. percent since 2010) has barely kept up with population growth (at just under 2 percent High average growth in the Nigerian in rural areas). Stagnating production and economy masks large variations across productivity in the farm sector, where half space and income groups, with increasing the population works, is a key reason for inequality between the north and the continued high poverty levels. Conversely, south, and between large urban centers sectors that have seen economic growth— and other areas. Increases in spatial including telecommunications—are not differences are likely to have undone the particularly labor-intensive and are too effect of economic growth on overall poverty. small to absorb much demand for nonfarm In the two-year period between 2010/11 employment, even with high growth rates. and 2012/13 only, average real consumption in the South South, South East, and South Jobs and workers in Nigeria West regions increased by 10 percent, 8 A majority of Nigerians work. Nigeria’s percent, and 4 percent, respectively, while population, the largest in Africa, was consumption levels in northern regions estimated at 158 million in 2011. Some stagnated. The strong role of modern, urban- 87 million people (over 50 percent) were based services and the low importance of between 15 and 64 years of age (Figure 3). agriculture in output suggests that sources of In this group of “working-age” adults, 53 growth have led to further spatial inequality million people were employed. Less than in the past fifteen years. 4 million people, or 6 percent of the active population, were unemployed—defined as those who were without a job and looking for work—in 2011.1 1 This reflects a much lower unemployment rate than the official figure of 23.9 percent reported by the National Bureau of Statistics (2011a). However, NBS estimates include all members of the workforce who have not worked 40 hours during the previous week, irrespective of whether they wanted to or were looking for work. x Figure 3: Many work, but in low-productivity jobs Distribution of Nigeria’s population (ages 15-64, in millions) Total population: 158 Working-age population: 87 Many employed and relatively few unemployed Inactive: 26 Labor force: 57 Unclassified: 4 The wage sector is In school: 13 Not in school: Employed: 53 small, especially Unemployed: 4 13 private sector Unclassified: Non-Ag Self- Non-Ag wage: Agriculture: 26 9 Many adults (mostly 1 employed: 17 women) are not in education or training, not working, and not looking for a job. Most workers work for Private: 4 Public: 5 themselves, whether in agriculture or not Note: ”Unclassified” refers to missing data. Source: Estimates based on GHS 2011. xi Most people work in low-productivity, increased from 59 to 63 percent between low-income jobs with no job or income 2007 and 2011, when more women entered security. Although two-thirds of the adult the workforce (Figure 4a). The increase in population is employed, productive jobs that employment has been accompanied by a generate sufficient income to keep people shift out of agriculture, whose share of total out of poverty are scarce. High participation employment fell from a peak of 58 percent rates and long hours reflect the prevalence in 2007 to 50 percent in 2011.2 Unlike in of subsistence work in agriculture, and the many other African countries, the net effect fact that most people lack access to private of workers shifting out of agriculture has or public safety nets and cannot afford not been an increase in self-employment to be unemployed. More than 80 percent in the household enterprise sector. Instead, of the employed population (43 million proportionally more jobs were created in the people) works in agriculture or is engaged wage sector, private and—especially—public in a household nonfarm enterprise. Both (Figure 4b). are forms of self-employment (wage work in Although growing access to employment agriculture is negligible), and these workers may be good news, not enough jobs pay consume what they produce or live on profits enough to keep families above minimum from what they sell. Only 4 million people subsistence while allowing time for work as employees for a private company, schooling and rest and recuperation. Two and three out of four nonagricultural wage out of five Nigerians live below the poverty workers are informally employed. threshold. Some 8 million children (aged Employment is growing and shifting 5–14) and elderly people (above 64 years of slowly away from agrarian to wage work in age) are working, and most adults work long private and public services. The share of the hours (more than 45 hours per week). working-age population that was employed Figure 4: More people are entering employment and shifting slowly out of subsistence farming into wage jobs a. Employment-to-population ratios, population aged 15–64, b. Employment by sector, population aged 15–64, 1999, 2007, 2007 and 2011 and 2011 90% 100% 8 6 9 4 3 80% 75% 77% 90% 0 1 6 71% 71% 2 69% 80% 70% 66% 27 63% 31 59% 70% 29 60% 57% 55% 49% 60% 5 50% 48% 5 50% 4 40% 32% 40% 30% 30% 23% 58 53 50 20% 20% 10% 10% 0% 0% 1 999 2 007 2 011 All 15-64 15-24 25-64 women men primary edu more than or less primary Agriculture HHE, industry HHE, services 2007 2011 Private wage, industry Private wage, services Public wage Source: Estimates based on GHS 1999 (NBS 2000), GHS 2007 (NBS 2008), and GHS 2011. on GHS 2011. 2 There is not a clear reason why there was a slight increase in the share of agriculture among those working from 1999 to 2007. xii Most Nigerians work for themselves or employed in the wage sector and less than their family. Four out of five (81 percent) one out of 15 workers is in agriculture (Figure of those who are employed do not work 5a). regularly for pay for someone else, but make Opportunities for more productive a living primarily out of the returns to their employment vary widely across the labor on their own family farm or profits country, reflecting differences in economic from household enterprises. Household growth and the degree of diversification farming is by far the dominant mode of work of production across regions (Figure 5b). in agriculture. Only one in 20 agricultural In the North East and North West regions, workers are wage laborers; the rest are two-thirds of the population remains in engaged in smallholder farming.3 Household farming. Most farming activities serve enterprises in Nigeria are mostly home-based families’ subsistence needs, and little paid nonagricultural activities, often involving wage employment—which usually comes only one household member and rarely with higher earnings—exists in the sector. engaging paid labor. The nature of jobs in By comparison, less than one in five workers Nigeria is thus similar to that of other lower- the South East region is involved in farming. middle-income countries in Sub-Saharan Instead, over half of the employed (56 Africa and strikingly different from that of the percent) are self-employed, and one in four is significantly more diversified upper-middle- a wage worker. income countries, where most people are Figure 5: Employment is still concentrated in low-productivity activities, especially in northern regions a. Structure of employment, Nigeria and comparator b. Structure of employment, Nigeria, by region economies in Sub-Saharan Africa 100% 3% 3% 1% 3% 3% 100% 9% 9% 11% 11% 19% 14% 90% 13% 13% 15% 90% 17% 22% 26% 80% 80% 18% 24% 28% 27% 22% 70% 27% 70% 24% 31% 31% 60% 28% 60% 50% 59% 50% 56% 40% 68% 40% 30% 57% 61% 62% 67% 50% 30% 64% 58% 55% 20% 50% 16% 20% 10% 7% 10% 18% 0% Low Income Lower-Middle Resource Rich Upper-Middle Total Nigeria 0% Income Income North Central North East North West South East South South South West Agriculture Household Enterprises Wage Services Wage Industry Agriculture HHE Wage Source: Filmer and Fox 2014; estimates based on GHS 2011. 3 Smallholder farms are those in which households own or hold user rights for a small amount of land (what is considered “small” may differ from country to country). They could work for subsistence, where most production is used for household consumption, or non-subsistence, where a fair amount of the output from food or nonfood crops is sold on the market. Although GHS data do not include information on landholdings, we assume that the vast majority of people who are self- employed qualify as smallholders. xiii Working is not enough to escape poverty; The jobless are divided among the it is where one works that matters. The unemployed (those looking for a job) poor and the nonpoor are about equally and the inactive (those not looking for a likely to be working, and employment-to- job), and these groups differ markedly in population ratios are not markedly different demographic and other characteristics. across consumption quintiles (Figure 6a). Compared to the entire working-age The sector of work is a stronger indicator population (ages 15–64), married women, of poverty patterns, most visibly for the northern inhabitants, and poor adult poorest and the richest. Half (51 percent) of women are more likely to be inactive. Family those working in agriculture belong to the formation, household chores, and social poorest 40 percent of the population. The norms are likely to keep them out of the labor two poorest quintiles are underrepresented market. Unemployment largely affects young in the nonagricultural sector, accounting for people, especially those with more education 34 and 27 percent of self-employment in and from wealthier families. These groups are industry and services, respectively, less still less constrained by family obligations, more for private wage work, and only 17 percent likely to expect to find a job after having of public sector workers. In contrast, the finished school, and better able to survive, richest 20 percent account for nearly half of with the support of their families, without all employment in the public sector and 40 working while looking for a job (Figure 7). percent of private wage work (Figure 6b). Figure 6: The poor work as much as the nonpoor, but in less well-paying sectors and occupations a. Employment-to-population ratios, by consumption quintile b. Distribution of workers according to consumption quintiles across sectors 70% 100% 66% 64% 64% 11% 61% 90% 19% 59% 60% 60% 57% 58% 58% 30% 54% 80% 17% 41% 40% 48% 50% 70% 23% 60% 20% 23% 40% Richest 50% 24% 24% 27% 4th 40% 20% 30% 23% 3rd 20% 30% 13% 2nd 20% 21% 15% 15% Poorest 20% 16% 10% 28% 7% 10% 10% 12% 13% 11% 10% 14% 0% 5% 0% Industry Services Private Private Public Poorest 2nd 3rd 4th Richest Industry Services Women Men AGR Self -Employed Wage Source: Estimates based on GHS-Panel, 2012/2013 (NBS 2013). xiv The move into productive work is with 40 percent of 20-year-olds still in slow school. However, 25 percent of young people between the ages of 15 and 24 are not Transition from school to work is slow, in employment, education, or training. In or does not happen. Although it is not particular, women and girls are more likely to possible to track individuals’ movements in be inactive than men and boys, at all ages. the labor market over time (only a two-year Moreover, it is not guaranteed that workers panel is available), cross-sectional data on will move into better job opportunities as occupational and educational status show they age. Women, in particular, are less likely that many young people enter the labor force to move into nonagricultural wage work over later in their youth, or not at all (Figure 8). time but more likely than men to move into One-third of young people are working by nonfarm household enterprise work. the age of 20, and half by 25. Many young people remain in education and training, Figure 7: Unemployment and inactivity affect different groups a. Group share of those not in employment, education, or b. Group share of unemployed vs. share of working-age training vs. share of working-age population (excluding population (excluding those in school) those in school) -64 Poor* women ages 25 Youth, richest 40%* Share of unemployed, share of working age population Share of NEET vs share of working age population South West Men with at least secondary South East and South South Women with at least secondary North At most primary Men with at most primary Married Women Women with at most primary Young Men Young Men Young Women Young Women 0 10 20 30 40 50 60 70 80 Working age population** Not in employment, education or training 0 5 10 15 20 25 30 35 40 Working age population** Unemployed Note: Categories are not mutually exclusive. *Poor = among 40% poorest by consumption levels. Richest = among 40% richest by consumption levels. **15–64. Source: Based on GHS 2011 and GHS-Panel, 2012/2013 for poverty numbers. xv Job trajectories are determined largely if there are opportunities for workers to by the circumstances in which people increase their earnings and improve their were born. Where people live, their gender, working conditions over time. If, by contrast, and what their parents did for a living are patterns of employment are determined early circumstances that are unrelated to talent, and many people are locked into low-income skill levels, or effort—the variables that activities without opportunities for change, arguably should determine job outcomes. workers’ options are unequal from the outset. Women are penalized from all perspectives Breaking the cycle of poverty, therefore, will in labor markets: compared to men they are require skill building through the removal of less likely to be active, more likely to be in barriers to a good-quality education. lower-earning occupations like farming and Underprivileged youth start working informal jobs, and earn less for a given level early. A key factor in Nigeria’s low job of education and experience (approximated mobility is premature transition into work. by age). Family background influences Child work is prevalent in Nigeria, as it is labor market opportunities, too; according all over the African continent, and provides to General Household Survey-Panel data, important contributions to family income. half the children of agricultural workers are It is particularly common for children themselves working in agriculture. Seen from in rural areas who help on the family a life-cycle perspective, being unemployed or farm. Nonetheless, some of the jobs that holding a low-paying job are less problematic children do expose them to harm: in some Figure 8: Transition from school to work is incomplete, especially for women a. School and work transition, women, ages 10–35 b. School and work transition, men, ages 10–35 100% 100% 90% Work and School 90% Work and School Work only Work only 80% 80% 70% 70% 60% 60% 50% School only 50% School only 40% 40% 30% 30% Not in Not in 20% employment, 20% employment, education or education or 10% training 10% training 0% 0% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Age Age c. Transition to job opportunities, women, ages 10–35 d. Transition to job opportunities, men, ages 10–35 100% 100% Non -farm wage Non -farm wage 90% 90% 80% Non -farm 80% household Non -farm School only Farm work 70% Farm work enterprise 70% School only household enterprise 60% 60% 50% 50% 40% 40% 30% 30% Not in Not in 20% employment, 20% employment, education or education or 10% 10% training training 0% 0% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Age Age Note: These are cross-sectional data (examining different cohorts at one point in time) and should not be interpreted as panel data (which trace one cohort overtime). Source: Estimates based on GHS-panel, 2012/2013. xvi cases health hazards, in some cases slow Nigerians experience significant seasonality progression through school due to multiple in their employment patterns given the obligations, and in some cases exclusion from high dependence on farm work, but they school altogether. do not shift significantly between jobs. Panel data show that most movement is Girls’ entry into work is also conditioned between inactivity and work, rather than by early family formation. In Nigeria, as in between different types of work. Only 8 many countries in Sub-Saharan Africa (Filmer percent of farm workers who worked during and Fox 2014), the gender gap in schooling the post-planting season had shifted to begins to widen more significantly at the age nonagricultural work in the post-harvest of 17. By this point, girls—especially from season. Young people move between poor families—are marrying, having children, school and work, and between different and entering into economic inactivity. forms of joblessness and work. Almost 30 The negative effects from early exit last percent of young people who were working throughout women’s working life (Figure 9). in agriculture in the post-planting season (which coincides with school holidays) were Figure 9: Girls leave school to marry earlier and do not back in school in the post-harvest season. enter working life Unemployed youth also shift between a. Girls vs. boys not in employment, education, or training employment and inactivity to some extent. 40% Transitions from agricultural to nonagricultural work are much more limited (Figure 10). Percentage not in employment, education or training 35% 30% Figure 10: Seasonal labor market mobility (post-planting 25% and post-harvest), 2012/2013 20% a. Employment status post-harvest, conditional on status post-planting, 2012/1013, all ages 15-64 15% 100% 10% 8% 8% 90% 4% 5% Employment status, post harvest 80% 0% 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 70% Age 60% Girls/Women Boys/Men 72% 86% 50% Working non-ag 88% b. Family formation by gender and age 40% Working ag, Not working 100% 30% 90% 20% 80% 10% 3% 19% Percentage ever married 70% 11% 60% 0% Not working Working ag, Working non-ag 50% Employment status, post planting 40% 30% b. Employment status post-harvest, conditional on status 20% post-planting, 2012/1013, youth ages 15–24 10% 100% 8% 12% 0% 90% 18% 21% 9% Employment status in 2012/2013 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 80% 3% Age 9% 5% 70% 19% 4% 62% Girls/Women 2011 Boys/Men 2011 20% 47% 60% Source: Estimates based on GHS 2011. 50% Non-ag work Ag work 48% 40% 27% 3% Unemployed 5% Other inactive 30% 61% 11% 5% In school 20% 17% 27% 27% 10% 21% 11% 0% In school Other Unemployed Agr work Non-agr inactive work Employment status 2010/2011 Source: Estimates based on GHS-Panel 2012/2013 xvii Barring seasonal variations, mobility Labor-related migration—seasonal and between job types seems limited. Available permanent, from rural to urban areas, panel data show that three out of four and to countries abroad—is driven by adults who were inactive or unemployed climatic conditions and conflict, as well as in 2010/2011 remained jobless in 2012/2013 by emerging labor and skills deficits and (Figure 11). Although this two-year time accompanying job opportunities in urban frame may be too short to properly evaluate growth poles, in fast-growing African opportunities for job mobility, it seems to countries, or in developed economies. be a worker’s family, location, gender, and International migration has been facilitated school circumstances that determine a by porous borders with neighboring countries worker’s transition into good or less good job and the establishment, over time, of a opportunities. Once on the job, there is less significant diaspora elsewhere in Africa and in likelihood of change. the United States. Those with low education tend to move to other African countries, while the highly educated move to developed Figure 11: Labor market mobility, 2010/2011 to 2012/2013 regions, particularly the United Kingdom and a. Employment status 2012/2013, conditional on status in the United States. Between 1990 and 2000, 2010/2011, all ages 15–64 the number of Nigerians abroad, estimated 100% from census data, increased by 40 percent 90% 18% 16% and those with a tertiary education grew from one out of five migrants living abroad to one Employment status in 2012/2013 80% 7% 70% out of three. Thus, while most Nigerians work 60% 78% in agriculture and household enterprises, 50% 69% Working non -ag a small group of workers belongs to a 40% Working ag, skilled labor force that appears to be more competitive internationally. 75% Not working 30% 20% 8% Skills matter for productivity and jobs. Set 10% 15% 14% against problems like unreliable electricity 0% Not working Working ag, Working non -ag and transport infrastructure, skills deficits are Employment status in 2010/2011 not cited in firm surveys as a key bottleneck to expanding business in Nigeria. However, b. Employment status 2012/2013, conditional on status in modernizing economies and structural 2010/2011, youth ages 15-24 transformation require new forms of skills.4 100% Even in lower-middle-income countries like 1% 2% 4% 11% 14% 90% 6% Nigeria, the skills content of occupations is Employment status, post harvest 80% 7% 6% 70% 55% expanding, placing new demands on workers 60% 41% 68% (World Bank 2014d). Non-ag work 50% 97% Ag work 40% 76% 1% Unemployed 13% Other inactive 30% 5% 21% 3% In school 20% 14% 27% 10% 17% 10% 0% In school Other Unemployed Agr work Non-agr inactive work Employment status, post planting Source: Estimates based on GHS-Panel 2010/2011 and 2012/2013. 4 In addition, enterprise survey results must be evaluated against the fact that they do not take into account informal firms or firms that were never created because of lack of skills or other constraints. xviii Good-quality basic education provides cost of materials such as books and school the fundamentals for skills development, clothing, long distances to school, and the but access to education is polarized. Net opportunity cost of foregone labor income. enrollment in primary school (the share Most educated workers are concentrated of primary-school-age children who are in the public sector, in spite of its relatively enrolled in primary school) has stagnated at small size. In 2011, more than half of those around 60 percent, while secondary school with a secondary or tertiary education enrollment has expanded. Overall, however, worked in the public sector. As a result, the 30 percent of young people still have no level of education is significantly higher in more than a primary education, and 15 the public than private sector. Three out percent have no education at all (Figure 12a). of five public sector workers had a post- Access to education is conditioned largely secondary education, compared to one in on family background, and poor children ten in the private sector (Figure 12b). More (aged 7–17) are several times more likely to work is needed to understand the causes and be out of school than those from wealthier effects of this skewed distribution of skills. families (NBS 2013). Factors that contribute to Because access to education is correlated poor children’s exclusion from the education with household welfare levels, it is possible system include the low value placed on that those with higher education can better education given a future in self-employment afford to be unemployed and hold out for a in a household-based activity on or off the “good” job, compared to those with limited farm, the poor quality of education, the high education and from poorer families. Figure 12: Access to higher education is uneven, and most educated workers are in the public sector a. Distribution by highest level of education achieved and b. Distribution of public and private sector employment by age group, 1999, 2007, 2011 level of education, 1999, 2007, 2011 100% 100% 3% 6% 2% 10% 90% 90% 16% 7% 1% 11% 80% 80% 41% 7% 70% 70% 59% 57% 29% 22% 30% 60% 60% 50% 50% 32% 40% 40% 30% 30% 25% 27% 57% 53% 8% 49% 20% 20% 12% 4% 3% 10% 10% 7% 7% 8% 4% 6% 0% 0% 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 15-24 25-64 Public Private Below primary Primary Below senior secondary Secondary Post-secondary Below primary Primary Below senior secondary Senior secondary Post-secondary Source: Estimates based on GHS 1999, GHS 2007, and GHS 2011. xix Those who do have access to education Fostering jobs that are good for are affected by poor quality of schooling, development which is evident in low levels of basic skills. The Nigerian economy needs to create When tested, 60 and 44 percent of students, between 40 and 50 million jobs between after completing grade 4 and 6 respectively, 2010 and 2030. Continued high fertility rates cannot read a complete sentence (World Bank (Figure 13a) imply that for several decades 2014d). Many actual and potential workers, to come, the working-age population is even young ones, lack the basic literacy, set to increase rapidly in absolute terms: numeracy, cognitive, and noncognitive skills by some 66 million people between 2010 that would support productivity growth in and 2030, compared to an increase of 35 both the formal and informal sectors. million people between 1990 and 2030. The skills content of jobs diverges across In response, the Nigerian economy needs regions, reflecting the evolution of to create 40 to 50 million jobs or more in economic activities around the country. that period, depending on assumptions The southern part of Nigeria is experiencing of the employment-to-population ratio. an increase in the use of cognitive skills, These numbers translate into over 2 million suggesting a move toward higher- additional jobs per year, mostly taken up by productivity and more modern economic new entrants to the labor market (Figure 13b). activities. By contrast, the North East and These jobs need to offer better opportunities North West zones continue to focus on for making a living than is currently the case, less machine-intensive farming and trade and more attention needs to be given to activities, which require mainly manual skills. family planning and other measures to lower fertility rates. Figure 13: Child and youth populations are growing fast, placing pressure on job markets a. Fertility rates, Nigeria, Sub-Saharan Africa, and the world b. Jobs needed 8 18 Projections 2010 - 2050 7 16 14 Fertility rate % 6 12 5 WORLD 10 Sub - Saharan Africa Millions 4 Nigeria 8 Nigeria: low fertility 3 Nigeria: constant fertility 6 Asia Latin America 4 2 2 1 0 0 2010 -2015 2015 -2020 2020 -2025 2025 -2030 Constant employment -to -population ratio: 41 million jobs needed Increasing employment to population ratio: 47million jobs needed Source: Estimates and projections from United Nations 2013. Unless otherwise specified (for Nigeria), they are based on medium fertility assumptions. xx Some jobs do more for development Jobs will need to be created in urban than others. More productive jobs are and rural areas. Nigeria’s urban population needed to help reduce poverty. The World more than tripled between 1980 and 2010, Development Report 2013 on Jobs defines increasing by almost 2 million people per “good jobs for development” as those that year. As of 2014, nearly half of the population have payoffs beyond the income received was living in urban areas, placing significant by the individual (World Bank 2012). In light pressure on land, public services, and job of Nigeria’s development challenges, key markets. These pressures will intensify in areas to focus on include: (i) promoting the decades ahead, as almost all population higher agricultural productivity, especially growth is expected to take place in Nigeria’s in smallholder farming, which can also help urban regions; by 2030, 60 percent of the set off strong rural dynamics in off-farm population may be in urban areas (Figure employment; (ii) bringing more girls into 14a). Urbanization has been concentrated education and productive employment, largely in the large metropolitan areas, and which would contribute to higher family this process is likely to continue (Figure earnings and possibly better education and 14b). Yet there is evidence that poverty nutrition for children; and (iii) focusing on reduction can be more closely linked to rural spatially balanced investments that provide diversification of poorer households out of opportunities in the poor northern regions, agriculture and urbanization to secondary especially for young people, and broad towns, rather than migration to big cities efforts to diversify sources of economic (Christiaensen, De Weerdt, and Todo growth further, both from a geographical and 2013). Together with the increasing spatial a sectoral perspective. Although the public inequalities in Nigeria, this points to the sector has been a significant source of wage need for investments that promote spatially jobs, it is not enough for the long term— balanced growth. private sector-led growth is needed. Figure 14: Urban areas, especially larger cities, will account for a large share of the population a. Nigeria, urban and rural population, estimates and b. Nigeria, urban population by size of agglomerations projections 70 180 60 160 140 Urban population (millions) 50 59 Increase Millions 120 40 100 51 47 28 39 80 30 27 60 20 31 24 14 48 40 20 16 10 22 20 13 10 13 12 11 10 11 7 24 9 13 11 16 0 0 1990 -2000 2000 -2010 2010 -2020 2020 -2030 1990 2000 2010 2020 2030 Rural est Urban est Rural proj Urban proj 10 million or more 1-10 million 300000 -1 million Fewer than 300 000 Source: Estimates based on United Nations 2013. xxi Agriculture and small nonfarm household than 17 million microenterprises employing enterprises in both rural and urban areas fewer than 10 people (NBS 2010). According will nonetheless account for the bulk of to enterprise surveys (World Bank 2014a), the new jobs for the foreseeable future. The poor state of basic infrastructure (including wage sector, where earnings and benefits electricity and transportation) and paucity are highest, remains modest at 17 percent of of finance are major areas of concern for workers in 2011. Nearly 10 percent of these enterprises of all sizes, market orientations, jobs are in the public sector. Even under and ownership types (Figure 15a). The poor favorable assumptions regarding wage sector business climate does not hold back firm growth rates in the next ten years, the wage creation per se—people work in small and sector will remain of limited importance, micro enterprises because they have to and more people will still be working in make a living—but it is likely to hold back agriculture and in the nonagricultural the growth of more productive firms and household sector. While it will be important result in “stunted firms.” Labor regulations to foster a formal, urban, and modern sector are not seen as a major constraint. Although that can create jobs with higher earnings, neither the cost nor skill level of labor Nigeria must also consider how to increase features as a problem in these surveys, there productivity in agriculture and nonfarm is some suggestion that wages in Nigeria enterprises and help young people in are high relative to productivity (Figure 15b), particular establish successful firms. which makes African firms less competitive internationally. Owing to the significant Fostering jobs across sectors expansion in public employment, the strong Labor demand in the wage sector concentration of educated persons in the government sector, and Nigeria’s public wage Poor investment climate conditions are premium, those with more education may be seen as the most significant problem to prepared to be unemployed for some time expanding businesses. Official statistics and “queue” for a well-paid job in the civil suggest that Nigeria’s private sector is skewed servant sector, making it difficult for private heavily toward smaller firms, including more companies to compete for qualified workers. Figure 15: Labor supply is not a major problem for firms, but labor costs are high relative to productivity a. Percentage of Nigerian firms identifying electricity, finance, b. Ratio of labor costs over value-added per worker skill levels, and labor regulations as major constraints, by firm characteristics Some foreign ownership Labor Costs over value-added per worker 60% Labor Costs ans % of Value Added Domestic Non-exporter 50% Some exports 40% Nigeria Lagos 30% Large (100+) 20% Medium (20-99) 10% Small (5-19) 0% Total China Kenya Thailand Brazil Malaysia Russia Nigeria South Africa Indonesia Sub-Saharan Afr 0 10 20 30 40 50 60 70 80 90 100 Skills Labor regulations Finance Electricity Source: Estimates based on World Bank 2014a. xxii Household enterprises The agriculture sector The household enterprise sector is likely Agriculture will remain the largest to continue to absorb a significant share employer for some time and, unless of those leaving agriculture, through more growth in the nonagricultural sector self-employment. Although Nigeria´s private becomes highly labor-intensive, wage sector has increased in recent years, employment in agriculture is expected to its capacity to absorb all workers coming out increase in absolute terms. Because the of agriculture is likely to be limited. Instead, sector consists mostly of smallholder farmers more new nonagricultural jobs are likely to be cultivating small land sizes with low levels created in the nonfarm household enterprise of productivity, there is significant scope for sector. Although this is a heterogeneous improving income opportunities. Higher sector, a vast majority of these firms tend productivity in agriculture would serve as to be informal, home-based firms catering an engine for nonfarm activities if it were to local markets. These firms tend to grow to increase income, along with demand for through an expansion in the number of firms goods and services in rural areas and smaller (that is, a growth in self-employment) rather urban centers. than through firm growth in employment, The main constraints to increasing although a few may graduate into small or agricultural productivity in Nigeria include medium-sized firms that are integrated into low recourse to inputs, poor quality large supply and distribution channels. In of inputs, limited access to credit and other words, most of them will remain small markets, and weak technical knowledge but provide livelihoods. Given these firms’ and practices. Efforts are needed to role as a source of income diversification for bring together farmers and local financial the poorest, in tandem with a transformation institutions and increase public investment in out of agriculture, it will be important to help rural infrastructure. The risks associated with these firms increase their productivity and agriculture investments could be mitigated earnings (Filmer and Fox 2014). through adjustments to land administration, Household enterprises face significant as well as regulations and policies to improve constraints in the business environment the rural business climate. Training and and with regard to skills. They suffer from advisory services could also be devised lack of access to finance, poor infrastructure, to improve farmers’ skills in applying new and limited access to markets, and their small technologies and farm practices to increase and irregular nature makes them vulnerable efficiency. to harassment. Urban policies rarely take market space for household enterprises into Building skills for the labor account, and in some areas they are explicitly market discouraged (Watson 2011). They are also Improving the quality of basic education likely to be held back by owners’ limited basic, would help increase the productivity entrepreneurial, and technical skills, and the of Nigeria’s workforce. Building a skilled relative lack of options for upgrading these workforce is a cumulative and time- skills. Skill levels are generally significantly consuming process, for which it is important lower in the informal household enterprise to build the foundations now. Nine to ten sector than in the formal wage sector. Those years of schooling build the foundations working as owners or contributing family of basic literacy and numeracy, together members have lower numeracy and literacy with workplace skills such as discipline, and much less formal schooling. Vocational team building, and familiarity with learning programs to develop skills are rarely tailored situations. In a context of high population to their specific needs and constraints growth, however, it will be a challenge to (Adams, Johansson de Silva, and Razmara expand the quantity of education services 2013). xxiii while also increasing their quality, improving evaluate these experiences to understand access for marginalized groups (including how public works programs can be designed children of poorer households and girls), and to influence employment outcomes more ensuring that access to education translates effectively. into real and relevant learning for all. These efforts should look at both demand-side and Improving data for policy making supply-side constraints. Better labor data are needed to provide the Education needs to be more relevant empirical basis for identifying appropriate to the labor market. Strengthening policies. This report relies heavily on the the employability of graduates and the wealth of information gathered through the productivity of enterprises will require better General Household Survey conducted by the links between schooling and job needs National Bureau of Statistics. Given resource within the general education sector, as well constraints, Nigeria is better off improving the as better-quality, more attractive offerings collection of labor data in this broad survey in technical and vocational education. Given rather than separately implementing ad hoc the early entry into work, especially for labor force surveys. The analysis conducted young people from poor families, and the for this report has highlighted three areas importance of self-employment, there is a that need attention: (i) data quality issues, as specific need to consider skills upgrading shown in the several rounds of data cleaning for those who already work in a household needed to provide consistent statistics; (ii) enterprise. poor documentation and archiving, which prevented the use of several rounds of the Reducing income volatility over household survey, especially to produce the short term national-level statistics using population Safety nets are needed to prevent people weights; and (iii) standardization, to permit from falling into (deeper) poverty and comparisons of key variables over time and protect economic development over the track the impact of policy changes and other longer term. In Nigeria, poorer households events. There is also a need to improve data need to manage both low and uncertain on the supply side. The first and last National labor income. Those in low-income Census of Industries and Businesses was employment, especially in agriculture, conducted in 1988/1989. As a result, the exact become unemployed or inactive in the nature and composition of the private sector season when there is no work to be done is unknown, and the constraints preventing on the farm. Moreover, the dependence on these firms from growing and creating more low-technology, rainfed farming leaves half of jobs are not well understood. Nigeria’s working population dependent on weather conditions for their daily bread. The government is working to design a National Social Safety Net Program that would target income support to the poor, including those whose labor income is not sufficient to keep them out of poverty. Nigeria is also experimenting with the use of public works programs to provide income support and short-term employment while simultaneously building assets. These programs provide temporary low-wage employment to unskilled manual workers on labor-intensive projects. A priority in Nigeria, as well as other countries, is to measure and rigorously xxiv 1 Jobs Why Are Important In Nigeria? 1 1. Why Are Jobs Important In Nigeria? Jobs are critical for Nigeria’s present Jobs drive development through improved and future, as better income-earning living standards, productivity, and social opportunities form the basis for more cohesion. Following the rebasing of the diversified economic growth and widespread country’s GDP in 2014, Nigeria ranks as prosperity. The high and stable economic Africa’s largest economy and is poised to growth witnessed in Nigeria in recent years become one of the 20 largest economies has not made a strong dent in poverty. in the world by 2030, with a GDP of US$1.3 Given that most poor families depend on trillion (McKinsey Global Institute 2014). Jobs labor income for their survival, the lack will be key to reaching this potential. As of opportunities for a young and rapidly discussed in the World Development Report increasing workforce remains at the core of 2013 (World Bank 2012), jobs—including high poverty levels, regional inequality, and informal ones—can be transformational social and political unrest in Nigeria (Box 1.1). along three dimensions: living standards, Rapid growth in the working-age population because poverty falls as people work their presents additional challenges for creating way out of hardship, especially in countries enough good jobs to employ the many new where the scope for redistribution is limited; people who enter the labor market each year. productivity, because efficiency increases Over 40 million additional jobs will be needed as workers get better at what they do, as in Nigeria between 2010 and 2030. To reduce more productive jobs appear, and as less poverty and help create more inclusive productive ones disappear; and social growth, those jobs will need to be more cohesion, because societies flourish as jobs productive and provide higher incomes than bring together people from different ethnic is currently the case. and social backgrounds and create a sense of opportunity (Box 1.2).5 Box 1.1: Nigeria’s job challenges in numbers The challenge of generating more and better jobs in Nigeria is shaped by key features of In 2011: its socioeconomic setting. Notably, there is 53 million Nigerians between the ages of 15 and no one single lens through which one can 64 were working develop a strategy for jobs. Drawing on Half of them were working in low-productivity the framework described in Box 1.2, Nigeria agriculture can be seen from various perspectives as 14 million workers belonged to the poorest 40 an agrarian economy, a conflict-affected percent of the population; their jobs do not pay enough to escape poverty environment, an urbanizing country, and a resource-rich economy. Focusing on the key 28 million adult workers, including 5 million young workers between the ages of 15 and 24, features associated with each type of situation had less than a primary education can help clarify where the policy focus should 17 million women were not working or studying lie. 8 million young people ages 15–24 were not working or studying Source: Estimates based on General Household Survey 2011. 5 The link between social cohesion and jobs is discussed at length in World Bank 2012. There appears to be a general consensus that better job opportunities are critical to the development agenda in a post-conflict setting due to the link between work and concepts of social cohesion. Establishing an empirical connection between jobs and social cohesion is 2 challenging, however. Box 1.2: Jobs drive development—the World Development Report 2013 The World Development Jobs Report 2013 on Jobs considers connected to Jobs how some jobs do more for Jobs in global markets that are development than others functional environmentally cities (World Bank 2012). For benign example, jobs for women can change the way households DEVELOPMENT invest in the education and Jobs for Jobs that give health of children. Jobs in cities the poor a sense support greater specialization LIVING SOCIAL of fairness PRODUCTIVITY and the exchange of ideas, STANDARDS COHESION making other jobs more Jobs that Jobs that empower link to productive. And in turbulent women networks environments, jobs can contribute to peace. For policy Jobs that do Jobs that makers, therefore, it is not not shift burden JOBS shape social to others identity only the number of jobs that matter, but their quality and contribution to a country’s development. Good jobs for development are those with the highest value for society, taking into account their value to the people who hold them as well as potential spillovers on others—positive or negative. Jobs with high pay and benefits may be attractive to individuals but may be less valuable to society if they are supported through government transfers or restrictive regulations, undermining the earnings or job opportunities of others. Jobs that reduce poverty, connect the economy to global markets, or foster trust and civic engagement can do more for development than others. Which jobs are good for development varies with a country’s level of development, demography, endowments, and institutions. Some of these country characteristics are particularly salient for Nigeria: In agrarian countries most people still work in agriculture and live in rural areas. Making smallholder farming viable is critical to address high poverty rates. Higher agricultural productivity can support the development of off-farm employment. At the same time, urban jobs connected to world markets set the foundation for cities to become dynamic. In conflict-affected countries the most immediate challenge is to support social cohesion. Employment is particularly important for ex-combatants and for young people who are vulnerable to participation in violence. Construction can help, as it is labor-intensive and can thrive even in poor business environments. In urbanizing countries productivity growth in agriculture frees people to work in cities. Jobs for women, typically in light manufacturing, can have positive impacts for households. Avoiding urban congestion and allowing the country to move up the value-added ladder are top priorities. Resource-rich countries may have substantial foreign exchange earnings, but the abundance may undermine the competitiveness of other activities and encourage the creation of jobs supported through transfers. Jobs that lead to a diversification of exports can have large development payoffs. Ultimately the role of government is to ensure that the conditions are in place for strong private sector-led growth, to understand why there are not more good jobs for development in a particular country, and to remove or mitigate the constraints that prevent more of these jobs from being created. Source: World Bank 2012. Jobs, particularly for young people, are a the government’s ability to create jobs—a central issue in the public debate in Nigeria. responsibility that they hold to be a basic Surveys conducted by Afrobarometer, which tenet of a democratic society, much more so measure African people’s attitudes with than other characteristics such as ensuring respect to social, political, and economic law and order, protecting media freedom, and developments, show that in Nigeria fostering multiparty political representation unemployment has overtaken poverty as the (Figure 1.1b). problem people see as most pressing. When “Work” is not synonymous with “real asked to rank the main problems facing opportunities,” however. As shown in this the country, people cite unemployment as report, many Nigerians work, but generally the most important challenge—well above in low-earning activities. Most work poverty (Figure 1.1a). Nigeria’s young people opportunities in the country are informal and are specifically concerned by lack of job do not come with a wage. These forms of opportunities. The surveys also point to the employment support livelihoods but do not political challenge of promoting job creation provide sufficient income to reduce poverty, and managing expectations about what do not support structural transformation governments should and can do. Those through productivity growth, and do not surveyed in Nigeria, even compared build self-esteem or social cohesion. The to their African peers, express strong key challenge, therefore, is to transform disappointment with the current economic the nature of work in Nigeria, moving from context in the country and with their a context of predominantly unpaid, low- own economic situation, but have high productivity, and low-skilled work to a context expectations for the future.6 A vast majority in which jobs are more productive. of survey respondents are disappointed in Figure 1.1: Unemployment and job creation are pressing concerns for Nigerians a. Percentage of youth and adult workers considering a b. Percentage of respondents considering a specific area as specific area the most pressing problem the most essential characteristic of democracy 30 What is essential to democracy? % defining issue as most pressing problem Unemployment is the most pressing problem in Nigeria 25 4 9 20 Government ensures job opportunities for all 15 40 Government ensures law and order 10 21 Media is free to criticize the things government does 5 Multiple parties compete fairly in elections 0 None of these/don't know 26 Ages 15-24 Ages 25 and above Source: Estimates based on data from Afrobarometer 2013. 6 According to Afrobarometer 2013, 67 percent of respondents rated the present economic condition in Nigeria as “very bad” or “fairly bad,” and 42 percent rated their own present living conditions as “very bad” or “fairly bad.” Looking ahead, though, 78 percent of respondents expected economic conditions to be “better” or “much better” within one year, and 84 expected their own living conditions to be “better” or “much better” within one year. 4 This report presents an updated picture of factory, with an employer, and a contract jobs in Nigeria and identifies opportunities that stipulates the size and frequency of for improving the quality of jobs. It draws paychecks, working hours, and access to on a range of labor diagnostics that update social protection. In Nigeria, as in many and extend earlier labor market analysis other developing countries in Sub-Saharan with new and comprehensive data (see Africa and elsewhere, the nature of that Haywood 2007; Haywood and Teal; and employment is different, less well defined, Treichel 2010). The diagnostics included in and less closely connected to one set of this report are intended to serve as an input tasks than in more developed regions. Many into the development of a jobs strategy for employed individuals do multiple jobs, Nigeria that would identify more specific working mostly for themselves and in an policy priorities across sectors with a view informal setting. Unemployment can also to bolstering job creation and raising the be understood in different ways. The strict productivity of existing jobs. definition, according to the ILO, focuses on whether a person did not work but was In outlining the basic theory and challenges available for work—a more general notion of creating better jobs, the report draws of the lack of sufficient, or sufficiently good, on the analytical frameworks developed in jobs. A broader perspective recognizing the the World Development Report 2013 on Jobs complexities of jobs and employment in and the World Bank Africa Region’s Flagship Nigeria is needed to understand the nature of Report on Youth Employment (World Bank work and its implications for individuals and 2012; Filmer and Fox 2014). Furthermore, households (Box 1.3). it builds on a multisectoral approach that incorporates and is developed in synergy The remainder of the report will: with recent or ongoing analytical work by the • Outline recent trends and links between World Bank and others in areas with strong growth, poverty, and jobs (Section 2); implications for labor market opportunities, such as demographic dynamics, poverty • Provide a diagnostic of jobs, workers, and outcomes, urbanization, education and skills, income opportunities in Nigeria, based on and private sector development. the most recent household data (Section 3); The report is based on the premise that jobs and employment are complex phenomena • Analyze the transitions, or lack thereof, in Nigeria. What does it mean to have a into productive work and the role of skills job and be employed in Nigeria? Many (Section 4); and people understand “jobs” as “formal wage • Discuss the future of jobs in Nigeria employment”: an occupation in an office or (Section 5). 5 Box 1.3: What is a job in Nigeria? In analyzing jobs and development in Nigeria, this report uses the following definitions: A job is defined here as a work activity that is remunerated in cash or in kind, and does not violate human rights (World Bank 2012). The definition includes labor activities that generate income for the household, even if income cannot be assigned specifically to individual household members, such as for household farming or household nonfarm enterprises. It includes goods produced for final consumption of the household (food from the family plot, for example), but excludes services consumed by the household itself (such as looking after children, cooking, fetching water, and so on). It does not include employment that goes against fundamental rights (ILO 1998). Forced labor, or child labor, is not a job (although, as discussed in Section 3, not all child work is child labor in the sense of violating children’s rights). Productive job is a broad term, linked to the quality of jobs, primarily their productivity and earnings capacity. Productivity generally refers to the value-added each worker generates. From the perspective of poverty reduction, productive jobs can be considered employment opportunities that generate income to bring people out of poverty and contribute to productivity growth in the economy. The working-age population encompasses the adult population between 15 and 64 years of age. The labor force includes the employed and unemployed. The employed are those who reported, in the relevant survey, having worked for pay or for profit for at least one hour in the previous week. Wage workers are those who work for someone else in exchange for a salary, daily wage, or “per-task” pay. To be self-employed is to work for oneself, making income from the profits of one’s activity. Because the distinction can be blurred in a household between self-employment and unpaid, contributing family workers, the report considers as self-employed all workers reporting to be employers, own-account, or contributing family workers in a household enterprise. The underemployed are those who work less than 40 hours per week but want to work more. The definition thus incorporates a subjective element, rather than focusing only on hours worked per week, which may be voluntary or involuntary. The working poor are those who are employed and living in households below the poverty line (the consumption level below which a household is classified as poor). Unemployment is defined according to the approach established by the ILO and includes those who do not hold a job but are actively looking for one. Unemployment rates are the share of unemployed people in the active population. This yields a much lower unemployment rate than the official one reported by Nigeria’s National Bureau of Statistics (NBS): 6 percent compared to 23.9 percent for 2011 (NBS 2011a). However, NBS estimates include all members of the workforce who have not worked 40 hours during the previous week, irrespective of whether they wanted to or were looking for work. The ILO’s definition of unemployment is widely seen as problematic in developing country settings in revealing the share of people who are not working but want to work. It is seen as more applicable to high-income settings where the vast majority of work entails wage/salaried jobs for which active search is necessary. The inactive are those who do not work and who are not looking for work. Informal employment refers to employment in production of goods and services that are in themselves legal, but where compliance is lacking on some legal aspects of employment or production: in this case, self- employment in firms that are not registered with the authorities or wage work without access to (mandatory) social security benefits. 2 High Growth But High Poverty 7 2. High Growth But High Poverty Like much of the African continent, Nigeria absorptive capacity is limited and poor people has seen significant but not sufficiently may not have the necessary skills or live in propoor economic growth. Poverty levels in urban areas, where formal wage jobs are likely Sub-Saharan Africa remain stubbornly high: to emerge. Over the medium term, Nigeria in spite of average GDP growth rates around faces important challenges in fostering 5 percent between 1999 and 2010, 48 percent the conditions for creating better jobs, of the population in Sub-Saharan Africa lived strengthening human capital, and reducing on less than 1.25 international dollars per day population growth. in 2010. This is also true for Nigeria, where Nigeria has developed into Africa’s largest growth rates have been high even by African economy, with relatively diversified output. standards, leading Nigeria to graduate into In 2014, a statistical reassessment of national middle-income status, but where one in two accounts data showed the overall size rural habitants is still poor (World Bank 2014c). of Nigeria’s gross national product to be Economic growth creates jobs, and jobs over 60 percent larger, bringing Nigeria create growth. Higher demand for goods into middle-income country status and and services increases opportunities for making it the largest economy in Africa. self-employed workers and boosts demand The rebased numbers showed the Nigerian for wage labor. Higher productivity of firms economy to be much more diversified and workers is reflected in higher economic and complex than had previously been growth. Whether economic growth can understood. Traditionally important sectors reduce poverty depends on many factors, but like agriculture, oil and gas, and trade the extent to which economic growth reflects account for just over half of Nigeria’s output, positive job-related changes is the most while “modern” sectors in industries and important link. Jobs are the most important transmission mechanism from growth to Figure 2.1: Composition of Nigeria’s GDP, using rebased household welfare, largely because poor numbers, 2013 people have few assets, other than their labor, Public Administration on which to rely in making a living, and jobs 4% Entertainment Other 2% 3% account for the largest source of household income (World Bank 2012). Improving labor- Agriculture Real estate 23% 8% related earnings—whether in the form of Finance and Insurance 3% higher productivity and output on the farm, higher profits in a household enterprise, Telecommunications 9% or access to a job with a higher wage—is Crude Oil and Gas 17% Transportation therefore central to improving the welfare of 3% poor people. Trade 17% Manufacturing, food Focusing only on growth strategies may and tobacco Manufacturing, 5% Construction Electricity and gas other not be sufficient to lower poverty. Growth 3% 1% 2% does not automatically trickle down to Source: World Bank 2014a. poor households. For example, resource- rich economies like Nigeria may see high growth due to natural resources, but little effect on aggregate employment numbers if export revenues are not used to diversify these economies and create jobs outside the narrow domain of extraction. Similarly, higher labor demand in the formal wage sector is not likely to make a large dent in poverty over the short run, because these sectors’ 8 services—such as telecommunications, This national average masks a striking real estate, manufacturing, construction, rural/urban divide: 52 percent of the rural and entertainment—together with public population was poor in 2013, compared to administration, are now shown to account for 14 percent of people in urban areas. There is a significantly greater share of output than also a regional pattern. Poverty is substantially previous estimates had shown (Figure 2.1). higher in the north than in the south, and two-thirds of all poor Nigerians reside in In spite of its significant economic power, northern areas. Nigeria suffers from relatively high levels of poverty. The country has benefited in the past Why has economic growth not brought down decade from economic and political reforms, poverty levels more significantly? First, welfare prudent macroeconomic management, and a effects from economic growth are diluted by return to political pluralism. Ample natural high population growth. Nigeria’s population resources provide Nigeria with an important growth has remained high at around 2.8 opportunity to sustain the diversified percent since 2000, depressing growth in economic growth needed to significantly per-capita GDP as expanding output must be improve the welfare of its large population shared among more and more people. While (McKinsey Global Institute 2014). Yet poverty the global population has seen a reduction in outcomes are relatively disappointing, with young dependents and a swelling in the uneven distribution of welfare improvements working-age population in the past 20 resulting from uneven distribution of years, Nigeria’s population pyramid remains economic growth. A recent assessment of dominated by children and youth (Figure 2.2). poverty found that 33 percent of Nigerians Children aged under 15 make up 44 percent were living in poverty in 2012/2013 (World of the population. Nigeria’s fertility rate, Bank 2014c). 7 at 6 births per woman, remains higher than that of Sub-Saharan Africa (5.4) and more While the poverty rate has not been than twice the world average of 2.5 (United increasing, the number of Nigerians living in Nations 2013; Bloom and others 2010; World poverty has grown because the population Bank 2014b). The result is that adult workers continues to expand rapidly. The number of in Nigeria still need to provide for a high poor people in Nigeria increased by one share of dependents, especially children. million between 2010 and 2013, to 67 million. Figure 2.2: Population pyramids, World and Nigeria, 1990 and 2010 a. World, 1990 b. Nigeria, 1990 80+ 80+ 75 -79 75 -79 70 -74 70 -74 65 -69 65 -69 60 -64 60 -64 55 -59 55 -59 50 -54 50 -54 45 -49 45 -49 40 -44 40 -44 35 -39 35 -39 30 -34 30 -34 25 -29 25 -29 20 -24 20 -24 15 -19 15 -19 10 -14 10 -14 5 -9 5 -9 0 -4 0 -4 -20 -10 0 10 20 -20 -10 0 10 20 Female Male Female Male 7 Poverty is defined as a level of consumption below the threshold deemed necessary for a minimal standard of living. 9 c. World, 2010 d. Nigeria, 2010 80+ 80+ 75 -79 75-79 70 -74 70-74 65 -69 65-69 60 -64 60-64 55 -59 55-59 50 -54 50-54 45 -49 45-49 40 -44 40-44 35 -39 35-39 30 -34 30-34 25 -29 25-29 20 -24 20-24 15 -19 15-19 10 -14 10-14 5 -9 5-9 0 -4 0-4 -20 -10 0 10 20 -20 -10 0 10 20 Female Male Female Male Source: United Nations 2013. High fertility rates in the past manifest High average growth in the Nigerian themselves as a surge in the number of economy masks large variations across young people entering the working-age space and income groups, with increasing population now, and most of them are inequality between rural and urban areas, not finding jobs in high-growth sectors. and between the north and the south. Between 2000 and 2010, Nigeria’s working- Increases in spatial differences are likely to age population grew by over 600,000 have undone the effect of growth on overall young people (ages 15 to 24) each year. poverty reduction. In the two-year period As demonstrated by many Asian countries, between 2010/11 and 2012/13 only, average such a bulge in the working-age population real consumption in the South South, South can become a “demographic dividend,” East, and South West regions increased with economic benefits arising from an by 10 percent, 8 percent, and 4 percent, increase in working-age adults relative to respectively, while consumption levels in young dependents. For this demographic the three northern regions stagnated. Given dividend to take shape as a strong force for the lack of comparable GDP and household development in Nigeria, two conditions must consumption data prior to 2010, it is not be met. First, population growth rates must possible to ascertain whether or not these come down so that the dependency ratio recent trends reflect a continuation of decreases and working adults have fewer previous trends; however, the strong role of children to maintain—in other words, the modern, urban-based services and the low population pyramid needs to become less importance of agriculture in output suggests “broad-based” (World Bank 2014b). Second, that sources of growth have led to further the growing ranks of working-age adults spatial inequality in the past 15 years. must find more productive jobs, translating into higher GDP growth. Most jobs and workers in Nigeria remain in sectors with low levels of labor productivity (Section 3). 10 Slow progress on reducing poverty in the existing jobs that Nigerians do will need rural areas is linked to the slow structural to be transformed into more productive work. transformation in the agricultural sector, Human capital is at low levels. Nigeria has because that is where most people work made some, albeit slow, progress toward (Section 3). Agricultural growth (averaging improving socioeconomic outcomes. just over 2 percent since 2010) has barely Nonetheless, Nigeria will fall well short of kept up with population growth (at just meeting many of its Millennium Development under 2 percent in rural areas). Stagnating Goals (MDGs), including for health, education, production and productivity in the farm and skills, and remains significantly behind sector, where half of the population works, other similar African countries (Table 2.1). is a key reason for continued high poverty Literacy and access to school are lower in levels. Conversely, sectors that have seen Nigeria than on average in Africa, child and economic growth are not likely to generate maternal mortality rates are higher, and fewer enough jobs. For example, the small-scale than two out of five births are attended by trade sector is limited in terms of income skilled health staff. opportunities. High-growth sectors such as telecommunications are not particularly Differences in well-being across regions labor-intensive and are too small to absorb resonate in socioeconomic indicators. much demand for nonfarm employment, Consistent with consumption patterns, even with high growth rates. disaggregated data reveal sharp differences in socioeconomic indicators across Nigeria’s Access to a job is not a guaranteed escape regions and states. Population growth is from poverty, as economic growth does not significantly higher in the northern regions translate into labor earnings for low-income and life expectancy much lower. The limited groups. Poor people, in fact, were as likely as progress that has been made at the national other groups to be employed in 2011, and less level mostly reflects advances in the southern likely than the nonpoor to be unemployed regions and around the federal capital, Abuja (Section 3). Accelerating poverty reduction in (World Bank 2014c). Nigeria will require more than job creation; Table 2.1: Human capital and the MDGs—Nigeria and African peers Nigeria Angola Ghana Kenya South Africa Sub-Saharan Africa Adjusted net enrollment rate, 56 86 82 83 90 76 primary (% of primary school aged children) Literacy rate, youth (% of 66 73 86 82 99 70 people aged 15–24) Infant mortality rate (per 1,000 78 100 49 49 33 64 live births) Under-5 mortality rate (per 124 164 72 73 45 98 1,000 live births) Maternal mortality ratio (per 630 450 350 360 300 500 100,000 live births) Births attended by skilled 39 47 68 44 91 46 health staff (% of total) Note: Data are for most recent year available. Source: World Bank 2014e. 11 3 What Jobs Do Nigerians Do? 12 3. What Jobs Do Nigerians Do? Many Nigerians work, but most are locked how, and why employment is changing. The into activities with low and volatile earnings. analysis below draws largely on household- Although the structure of employment level data from 1999 to 2013. Several national is changing, most Nigerians depend on household datasets describe jobs in Nigeria, subsistence agriculture for their livelihoods. although they vary in the questions they ask Those entering jobs off the farm do and how they ask them (Box 3.1). This section so primarily by working informally for draws on different datasets depending on the themselves, especially in services like small- questions to be addressed. scale retail trade, personal services, food preparation, and similar occupations that What do jobs look like in Nigeria? generally pay little and have low productivity. A majority of Nigerians work. Nigeria’s Only limited labor activity takes place in a national population—the largest in Africa— “labor market” and, unlike in more developed was estimated at 158 million people in 2011.8 economies, a majority of jobs do not come Some 85 million people (over 50 percent) with a wage. were between 15 and 64 years of age. In this group of “working-age” Nigerians, 53 million There is a great deal of work in Nigeria, people, or nearly two-thirds, were employed. but few jobs offer earnings that guarantee Less than 4 million people were unemployed an adequate and stable standard of living. according to the ILO’s definition, meaning Understanding how policy can help transform that they were without a job and looking for Nigeria’s employment structure from the work (Figure 3.1). The relatively high share of current context into one characterized by the population in employment is comparable better pay, greater productivity, and increased with other agrarian economies in Sub- opportunities, will require a clearer picture Saharan Africa. Unemployment rates are also of how and where Nigerians work, who is low, at 6 percent of the active population in excluded from productive jobs, and whether, 2011. Box 3.1: Data for analyzing labor and jobs The data used for much of this report come from the household survey program of Nigeria’s NBS. Although the NBS does not conduct a regular labor force survey, the multi-topic household surveys described below contain core labor statistics that generally follow international approaches. The General Household Survey (GHS) was started in the 1990s. The GHS is an annual household-level survey carried out in the spring. It produces state-level estimates. For the purpose of this report, the GHS has the advantage of providing a series of annual estimates of the labor market situation, although it lacks employment details (such as defining informal work by ILO standards). This report uses several years from 1999–2011; (see NBS 2000 and NBS 2008) data were unavailable for some years (including 1996 and 2005). The General Household Survey–Panel, 2010/2011 and 2012/2013, is used for more detailed information in specific areas such as earnings, broader employment conditions, intergenerational mobility, and migration (NBS 2011b and NBS 2013). The GHS-Panel is representative at the zonal level. The questionnaire contains more detailed information on work than the GHS. The Multiple Indicator Cluster Survey (MICS) is a household survey program supported by the United Nations Children’s Fund (UNICEF). It focuses on specific aspects of the socioeconomic well-being of children and women. This set of harmonized surveys produces the internationally comparable estimates of child work and child labor used in this report. Other possible sources were not used, as they were not conducted at frequent enough intervals. These include the Nigeria Living Standards Survey (2003/04 and 2009/2010) and the National Manpower Stock and Employment Generation Survey (2009). Other sources did not cover the labor market broadly enough. For example, the quarterly Job Creation Survey, introduced in 2012, surveys formal establishments that employ 10 or more persons, formal professional services that employ fewer than 10 persons, and public institutions. Its estimates of informal sector job growth are derived through a model rather than an actual survey. 8 Population numbers are based on weighted population estimates from the respective NBS surveys used. These surveys are designed to be nationally representative and are weighted to equate with total population. However, due to differences in weights and missing values, the population estimates differ slightly across surveys. They can also differ from those reported by the United Nations Population Division due to differences in methodology. 13 Figure 3.1: Distribution of Nigeria’s working-age population, millions Total population: 158 Working-age population: 87 Many employed and relatively few unemployed Inactive: 26 Labor force: 57 Unclassified: 4 The wage sector is In school: 13 Not in school: Employed: 53 small, especially Unemployed: 4 13 private sector Unclassified: Non-Ag Self- Non-Ag wage: Agriculture: 26 9 Many adults (mostly 1 employed: 17 women) are not in education or training, not working, and not looking for a job. Most workers work for Private: 4 Public: 5 themselves, whether in agriculture or not Note: ”Unclassified” refers to missing data. Source: Estimates based on GHS 2011. 14 There is a high quantity of jobs, but quality is sector (central or local government). Those low. While two-thirds of the adult population working for a private company account for 9 is employed, productive jobs are scarce. High percent of overall employment, and most of participation rates, work weeks of 40 hours or them are informally employed. more, and low levels of unemployment reflect Access to employment differs according to pervasive subsistence work in agriculture, age, location of residence, gender, and level and the fact that most people lack access of education (Table 3.1). to private or public safety nets and cannot afford to be unemployed. So while the • Young people are less than half as likely quantity of jobs is not a problem per se, the to be employed as older workers. Only 32 quality of jobs is low. More than 80 percent percent of young people (ages 15 to 24) of the population works in agriculture or is are working, compared to 77 percent of engaged in a household nonfarm enterprise. adults (ages 25 to 64). The gap is explained Both are forms of self-employment; these partly by the fact that many young people workers have no employer and generally lack are still in school, but also by the greater access to any form of social security. Among difficulties they face in finding a job when nonagricultural wage workers (those with an they look for one. Unemployment among employer), three out of four are informally young people is 14 percent, compared to employed. A large share of the remaining 5 percent for adults. quarter of wage workers work in the public Table 3.1: Access to jobs differs across groups Labor force participation Employment-to- population Unemployment rate (%) ratio (%) rate (%) ALL 67 63 6 Age 15-24, all 37 32 14 15-24, not in 72 62 14 school 25-64 81 77 5 Gender Men 74 69 7 Women 60 57 6 Highest grade completed (population not in school) Less than 74 70 6 primary Primary 86 83 4 Secondary 84 77 8 Some tertiary 92 82 10 Region North Central 72 69 4 North East 71 65 9 North West 56 52 8 South East 71 67 6 South South 70 65 7 South West 68 65 6 Note: Population ages 15–64, 2011. Source: GHS 2011. 15 • Access to employment differs between men • Access to employment is not, in general, a and women. While nearly 70 percent of strong indicator of spatial inequalities, for men are working, less than 60 percent of reasons like the high level of subsistence women are employed. Women who are work across states in Nigeria. There is one not working are generally not looking significant exception, however: only half for a job. As will be discussed in Section of the population in the poorest North 4, early marriage and childbirth affect Western region is employed, compared to women’s transition into working life. approximately two-thirds in other regions. • Those who have never been to school, or who left school after only a few years, are less likely to be working than those Employment is slowly shifting with at least a primary grade certificate. away from agriculture Of those working-age adults with less Employment is growing and changing than a primary education, 70 percent in nature. The share of the working-age are employed, compared to 83, 77, and population that was employed remained 82 percent, respectively, of adults who relatively stable between 1999 and 2007, but completed primary school, secondary increased from 59 to 63 percent between degrees, or some post-secondary training. 2007 and 2011. This increase is noticeable These differences are due entirely to lower across all ages and education levels. It is activity among low-educated women, the direct result of an increase in women’s who account for 83 percent of the inactive employment, which grew from 48 to 57 working-age population not in education percent while that of men stagnated. or training. Conversely, unemployment Employment increased among both younger is higher for those with more education, and older women, but more for women with reaching 10 percent for those with post- little education than for those with more than secondary education. Only 11 percent of primary education (Figure 3.2). the population has some post-secondary training, but they account for 21 percent of the unemployed. Figure 3.2: More people are entering employment and shifting slowly out of subsistence farming into wage jobs a. Employment-to-population ratios, population ages 15–64, b. Employment by sector, population ages 15–64, 1999, 2007 and 2011 2007, and 2011 90% 100% 8 6 9 4 3 80% 75% 77% 90% 0 1 6 71% 69% 71% 2 70% 66% 80% 27 63% 31 59% 70% 29 60% 57% 55% 49% 60% 5 50% 48% 5 50% 4 40% 32% 40% 30% 30% 58 23% 53 50 20% 20% 10% 10% 0% 0% 1 999 2 007 2 011 All 15-64 15-24 25-64 women men primary edu more than or less primary Agriculture HHE, industry HHE, services 2007 2011 Private wage, industry Private wage, services Public wage Source: Estimates based on GHS 1999, GHS 2007, and GHS 2011. 16 Focusing on primary jobs,9 the recent significantly more likely to work in wage increase in employment has been employment. The share of employment in accompanied by a small shift toward a more nonfarm household enterprises has fallen for modern employment structure. Between all groups, especially young people (Figure 1999 and 2007, the share of agricultural 3.3). employment increased from 53 to 58 percent. Education is no longer a sufficient condition Since then, however, the agriculture sector for accessing a better job. More highly has been falling in importance, and by 2011, educated young people are still less likely 50 percent of the employed were working than those with little education to work in the in agriculture. Unlike in many other African agricultural sector, but access to some post- countries, the net effect of workers shifting primary education is now much less likely to out of agriculture has not been an increase guarantee a job outside of agriculture than in the household enterprise sector. Instead, before. Most importantly, over half of young more jobs have been created in the wage women with some secondary education sector, private and—especially—public. or more are now working in agriculture, Aggregate trends hide varied changes in compared to about one-quarter in 1999. This access to job opportunities across groups. apparent puzzle reflects the gap between The overall change toward less agricultural rapid growth in the working-age population work since 2007 is due entirely to the smaller and expanding education on the one hand, share of agricultural workers among older and limited demand for workers in the workers. In contrast, the share of agricultural nonagricultural wage sector on the other. It is work increased significantly for young more surprising, however, that the household women (ages 15–24) in particular, reflecting enterprises sector has not absorbed the an increase in this group’s labor force surplus labor, as has been the case in other participation. Men of all ages have become African countries (Filmer and Fox 2014). Figure 3.3: Young women and those with some education have moved into agriculture and wage work a. Share of employment by age and gender b. Share of employment by education and gender, ages 15–24 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 1999 2007 2011 Women, primary or Women, more than Men, primary or less Men, more than Women 15 -24 Women 25 -64 Men 15 -24 Men 25 -64 less primary primary AGR HHE Wage AGR HHE Wage Source: Estimates based on GHS 1999, GHS 2007), and GHS 2011. 9 Employment categories are defined based on the type (wage, self-employment) and sector of employment that respondents reported for their primary jobs. 17 Job transitions are not improving labor on their own family farm or profits fast enough to help reduce from mostly home-based nonagricultural poverty activities, often involving only one household member and rarely engaging paid labor. There are still not enough productive jobs. Household farming is by far the dominant Although growing access to employment mode of work in agriculture. Only one in 20 may be good news, not enough jobs in agricultural workers are wage laborers; the the Nigerian economy generate sufficient rest are engaged in smallholder farming. income to keep people above the poverty This profile of work (Figure 3.4a) is similar to line. With two out of five Nigerians living that in other Sub-Saharan African low- and below the poverty threshold (World Bank middle-income countries. There is a striking 2014c), the income being earned is too low difference, however, in the size of the wage to help families meet even basic needs. Some sector compared to African upper-middle- 8 million children (ages 5–14) and elderly income countries. More generally, the wage people (above 64 years of age) were working sector in Nigeria is small compared to East in 2011, showing that all household members Asian lower-middle-income countries like are called on to help meet the household’s Indonesia, the Philippines, or Vietnam, where subsistence needs, irrespective of other the wage sector employs 40, 57, and 35 individual needs such as schooling. Employed percent of workers, respectively (World Bank adults also work more than 45 hours per 2014e). Employment and GDP are weakly week on average, and a majority of those linked in Nigeria (Figure 3.4b), and therefore who work less than 40 hours (60 percent) do business-as-usual GDP growth is unlikely not want more work, possibly because they to bring an increase in household incomes are occupied with household chores. The and a resulting decrease in poverty. The kinds of jobs available and the earnings they private wage sector, while expanding, is small. can offer are a more important problem than Nonagricultural wage jobs, which in more the number of jobs per se. developed countries account for a majority Most Nigerians work for themselves or of jobs and which tend to offer better income their family. Four out of five (81 percent) opportunities, make up 17 percent of all jobs of those who are employed do not work in Nigeria. More than half of wage jobs are in regularly for pay for someone else, but make the public sector. a living primarily out of the returns to their Figure 3.4: Employment is still concentrated in low-productivity activities a. Structure of employment, Nigeria and comparator b. Agriculture, industry, trade, and other services: share of economies in Sub-Saharan Africa GDP vs. share of employment 100% 60 90% 50 80% 50 70% 40 60% 50% 31 30 27 40% 24 22 20 30% 20 17 20% 10% 10 6 0% Low Income Lower-Middle Resource Rich Upper-Middle Total Nigeria 0 Income Income Agriculture Trade Other services Industry Agriculture Household Enterprises Wage Services Wage Industry Share of GDP (2012) Share of Employment (2011) Source: Filmer and Fox 2014; World Bank 2014c; estimates based on GHS 2011. 18 Opportunities for more productive in Nigeria are affected by conditions and employment differ greatly across the productivity in farm and nonfarm household country. In the North East and North West enterprises than a focus on primary jobs may regions, two-thirds of the population suggest. remains in farming. Most farming activities serve families’ subsistence needs, and little Figure 3.6: Households and individuals have to diversify paid wage employment—which usually their sources of income comes with higher earnings—exists in the a. Share of households that depend on farm income only, on sector. By comparison, less than one in five nonfarm income only, or on both workers the South East region is involved in farming. Instead, over half of the employed 100% (56 percent) are self-employed, and one in 90% 22 80% 38 four is a wage worker (Figure 3.5). These 43 46 43 70% 62 59 differences in access to better-paying jobs 60% in a modernizing economy underlie regional 50% 24 differences in poverty. 40% 26 67 37 46 30% 12 18 20% Figure 3.5: Better employment opportunities are 10% 18 27 24 22 30 13 concentrated in the south, particularly in South West 0% 7 Distribution of employment by occupation/sector and All North Central North East North West South East South South South West region, 2011 Farm only Nonfarm only Both 100% 9% b. Share of employed with a second job, by sector 9% 17% 14% 90% 22% 26% 80% 24% 100% 28% 1 2 1 1 9 5 7 70% 24% 31% 90% 15 10 28% 8 14 80% 3 60% 70% 50% 56% 60% 40% 50% 67% 64% 30% 58% 84 55% 40% 81 80 78 50% 20% 30% 10% 18% 20% 0% 10% North Central North East North West South East South South South West 0% Agriculture HHE Wage All sectors Farm Non-farm HHE Non-farm wage No second job Farm Non-farm HHE Non-farm wage Source: Estimates based on GHS 2011. Source: Oseni, McGee, and Dabalen 2014; estimates based on GHS 2011. Households diversify their income sources by working on and off of the farm. The focus Because productivity and earnings are low, on primary jobs hides a diverse picture, as working is not enough to escape poverty. more households engage in multiple jobs and The poor and the nonpoor are about equally have multiple income sources than those that likely to be working, and employment-to- do not (Figure 3.6). This is achieved in part population ratios are not markedly different by having different family members work in across consumption quintiles (Figure 3.7a). different occupations, but even at the level of Instead, where one works is a stronger the individual, there is some diversification. indicator of poverty patterns, most visibly for One in five of those employed has a second the poorest and the richest. Half (51 percent) job, mostly as a self-employed person. For of those working in agriculture belong to the those whose primary job is not in agriculture, poorest 40 percent of the population (the the second occupation is most often in two poorest quintiles, hence). Those in the agriculture, followed by work in a nonfarm two poorest quintiles are underrepresented household enterprise. For the purposes of in the nonagricultural sector, accounting for this report, this also means that more people 34 and 27 percent of self-employment in 19 industry and services, respectively, less still Patterns in poverty and sector of work for private wage work, and only 17 percent of link closely to variations in income. Data public sector workers. In contrast, the richest on household enterprise earnings are 20 percent account for nearly half of all public not available; however, even within the sector employment and 40 percent of private wage sector, income opportunities differ wage work (Figure 3.7b). significantly according to sector of work, Figure 3.7: The poor work as much as the nonpoor, but in with urban-based, formal, and public sector less well-paying sectors and occupations jobs paying best. The mining sector, drawing a. Employment-to-population ratios, by consumption quintile on oil rents, offers by far the highest wages. Pay is also high in the construction sector, which has expanded rapidly in line with an 70% 66% 64% 64% 61% 60% oil-driven real estate boom in recent years, 59% 58% 58% 60% 57% 54% 50% and in real estate/finance. Health jobs, which 40% tend to be in the public sector, and utilities 30% are also at the high end. By contrast, private sector-based activities like transport, personal services, and trade, which tend to be run on a 20% 10% small scale, pay much less (Figure 3.8). 0% Poorest 2nd 3rd 4th Richest Women Men Figure 3.8: Wages vary significantly by sector Median wage per month, in US$, per sector, 2013 b. Distribution of workers according to consumption quintiles across sectors 100% 11% 90% 19% Mining 30% Utilities 80% 17% 41% 40% 48% Health 70% 23% Finance/Real Estate 60% 20% Construction 23% Richest Professional etc. 50% 24% Public Adm 24% 27% 4th 40% 20% Education 23% 3rd 20% Transport 30% 13% 2nd Manufacturing 21% 15% 15% Poorest 20% 16% 10% Other 28% 7% Agriculture 10% 12% 13% 11% 10% 14% Personal Services 0% 5% Trade Industry Services Private Private Public 0 100 200 300 400 500 600 Industry Services USD/month AGR Self -Employed Wage Source: Estimates based on GHS-Panel, 2012/2013. Source: Estimates based on GHS-Panel, 2012/2013. 20 Jobless people are a as well as occupational segregation, social heterogeneous group norms, and fear of sexual harassment (Filmer The jobless are made up of the unemployed and Fox 2014). (those looking for a job) and the inactive Unemployment, in the sense of joblessness (not looking for a job). These two groups among people who are actively seeking differ markedly in demographic and other work, is not a significant phenomenon characteristics. Married women make up a in Nigeria and largely afflicts a different majority (70 percent) of the inactive who group. It affects some 3.6 million people, are not in education or training (Figure while almost four times as many jobless 3.9a), owing largely to household duties. people, 12.4 million, are inactive. Although Relative to their share in the working-age most adult Nigerians work, unemployment population, young women are more than has increased markedly over the past few twice as likely to be inactive and out of years—tripling between 2007 and 2011. school, and those with less education are Young people are disproportionately. more likely than others to be inactive. And affected by unemployment. Young men are while those with little or no education make overrepresented among the unemployed, up 31 percent of the working-age population, more so than young women (Figure 3.9b). they account for over half of all the inactive. As in many African countries, unemployment People living in the agriculturally dominated is a more significant problem for those with northern regions (especially the North West) higher education than for those with little are more likely to be inactive than those schooling. It follows that unemployment, in the south. Poor women ages 25–64 are unlike inactivity, is not prevalent among significantly overrepresented among the poor people, who cannot afford to be inactive, whereas this does not hold for poor unemployed or wait to find jobs that match men. These gender differences are seen in their expectations or education. In fact, young many countries in Sub-Saharan Africa, where people belonging to the richest 40 percent of women’s employment opportunities are the population are overrepresented among constrained by differences in the age and the unemployed. impact of marriage and family formation, Figure 3.9: Unemployment and inactivity affect different groups a. Group share of inactive not in school vs. share of working- b. Group share of unemployed vs. share of working-age age population (excluding those in school) population (excluding those in school) Share of NEET vs share of working age population Share of unemployed, share of working age population Poor* women ages 25 -64 Youth, richest 40%* South West Men with at least secondary South East and South South Women with at least secondary North Men with at most primary At most primary Women with at most primary Married Women Young Men Young Men Young Women Young Women 0 10 20 30 40 50 60 70 80 0 5 10 15 20 25 30 35 40 Working age population** Not in employment, education or training Working age population** Unemployed Note: Categories are not mutually exclusive. *Poor = among 40% poorest by consumption levels. Richest 40% = among 40% richest by consumption levels. **15–64. Source: Based on GHS 2011 and GHS-Panel 2012/2013. 21 Work across the three main productivity (Oseni, McGee, and Dabalen domains: farms, household 2014). enterprises, and wage jobs Although agricultural employment is A large share of Nigerian households rely on dominated by household smallholder farming for employment and income, even in farming, the use of occasional wage labor is peri-urban areas. (And as seen above, farming significant. In most cases, farmers occasionally is the most important second occupation for hire other farmers in harvest or planting those in the nonfarm sectors.) The conditions times. Almost half of all households (46 and type of farming differ across the country percent) use hired labor. These households depending on climatic and other conditions. employ an average of 40 man-, woman-, or Livestock activities are much more common in child-days per year. the north than in the south. Conversely, one The nonfarm sector is gaining significance in four households in the South East engage in Nigeria. As discussed above, while jobs in higher market value cash crop production in farming remain important, a decreasing (not including groundnuts, which has low share of adults is engaged in farming. market value), compared to only one in one Most jobs outside agriculture still take hundred households in the North East. place in household enterprises; in 2011 Most production is focused on low- about 60 percent of households ran such a productivity subsistence farming. The share family-based microenterprise (NBS 2013). of employment in farming is higher in the Household-based activities outside of northern regions, where the semi-arid climate agriculture provide complementary income is less favorable for cultivation. Three out to rural farm-based households and are the of five farming households focus on staple most important form of activity in urban crops only, and poverty is highest among areas, over and above wage employment. In households that undertake farming only the South West region, household enterprises (40 percent of rurally based farm households account for more than half of all jobs, but are poor, compared to 19 percent of even in the northern regions that remain households that have diversified completely dominated by farming, one-quarter of the out of the agricultural sector, and 31 percent employed work in a nonfarm household for those that mix farm and nonfarm enterprise as their primary job. In rural areas, activities). At the same time, farm activities many workers also shift between farming and contribute only half of net household household enterprises on a seasonal basis. income even in areas where most people are Most household enterprises are very small employed primarily in farming (Oseni, McGee, and informal (for example, microenterprises), and Dabalen 2014). although there are differences across these Farmers have little access to human or firms. Eight out of ten are one-person physical capital, which holds back productivity activities; less than 3 percent have five growth. A majority of farm-dependent employees or more. More than half are households rely only on their own labor, land, operated in or around the home. They and environment, without agricultural inputs provide services, the majority in retail trade such as fertilizers, pesticides, or draft animals. or personal services, although they are Less than 4 percent have access to irrigation, venturing into manufacturing goods as well. and less than 15 percent benefit from They cater mainly to final local customers agricultural advisory services. Yet agricultural and not to other businesses. Only 6 percent households with more diversified farming of these firms are registered. They have little across various crops, which could draw on access to formal means of financing and rely agricultural inputs and credit, and which had on household savings or extended family received information about proper farming for start-up capital. The median income of practices, benefit from higher agricultural a household enterprise is approximately 22 US$30 per month (NBS 2013)—less than Wage employment expanded faster than one-quarter of the median monthly wage in the household enterprise sector in the three manufacturing (about US$134). southern regions. As mentioned above, however, most wage employment remains In spite of their generally low income- concentrated in the public sector, particularly generating capacity, these enterprises provide in public administration, education, and opportunities for both increasing household health. Although private wage employment income and diversifying it away from has increased significantly, it only represents 7 subsistence farming, where it is even lower. percent of total employment. The rural nonfarm enterprise sector has been connected with significant poverty reduction Wage employment is concentrated in smaller in Asian countries (Filmer and Fox 2014; informal firms as well. According to the World World Bank 2012). These enterprises offer the Bank Enterprise surveys (World Bank 2014a), first stepping-stone out of agriculture for low- Nigerian firms—even in the formal sector— skilled youth and adults who, like a majority are generally both younger and smaller of Nigerians, live in areas where medium or than on average in Sub-Saharan Africa or large private sector firms do not exist and/ in other regions of the world (Figure 3.10a). or who may not have the skills or experience Low average age is likely to reflect high firm required for a wage job. And although the turnover, with many new firms entering and majority of household enterprises are very many firms going out of business at any small, there is a great deal of variation in one time. As a result, much employment income-generating capacity. Men are more is created, but also lost. Nigerian firms are likely to be working in household enterprises also comparatively small (Figure 3.10b). This than women, who are predominantly need not be a problem per se, but recent undertaking agricultural activities, but women research points out that Nigerian firms are now make up a majority of the self-employed, “stunted” in that they generally employ a especially in the services sector. smaller number of workers than would be the case in an economy with more efficient Wage employment has been growing resource allocation (Iacavone, Ramchandra, rapidly, but from a low base. This is especially and Schmidt 2014). In more developed notable in the South West region, where economies, larger firms are generally more Lagos is located. Here, between 2007 and productive because higher-productivity firms 2011, the share of wage employment in total are more competitive and, as such, usually employment doubled to nearly 20 percent. Figure 3.10: Firms in Nigeria are young and small on average a. Average age, enterprises in Nigeria and comparators b. Average number of employees, enterprises in Nigeria and comparators 25 60 50 20 Average number of employees 40 15 Age (years) 30 10 20 5 10 0 0 LAC World SA EAP SSA MENA ECA Nga, all Nga, Nga, no SA LAC World ECA EAP SSA MENA Nga, all Nga, Nga, no small exports small exports firms firms Note: Includes formal sector firms only. LAC= Latin America and the Caribbean, SA= South Asia, EAP= East Asia and the Pacific, SSA= Sub-Saharan Africa, MENA= Middle East and North Africa, ECA= Eastern and Central Europe and Central Asia. Source: World Bank 2014a. 23 able to expand faster than less competitive workers. While private sector jobs are almost firms.10 In Nigeria, however, high-productivity exclusively (96 percent) informal, three out of firms are more evenly spread across all size four public sector workers are also informally categories, suggesting that productive firms employed (Figure 3.11b). face constraints to expanding production and Informality is “normal” at the stage of employment. development where Nigeria finds itself. Informal is normal, and will continue to be so. Indeed, in many countries in Latin America Most Nigerians work in informal jobs, defined and East Asia, informal employment as wage workers working without a contract increased with growth (OECD 2009; Perry and self-employed/household enterprise and others 2007). As such, informality is not workers in firms that are not registered with likely to fall with economic development the authorities (Box 3.2). By this token, self- over the medium term, and the share employed workers in the farm sector and of informal employment is not a good nonfarm household enterprise workers are indicator of changes in job opportunities. overwhelmingly informal. Some 96 percent As will be discussed in Section 5, better job of the self-employed working on their own opportunities could most likely be created farm and 84 percent of the self-employed in by shifts within the informal sector (that is, the nonfarm sector are not registered with from subsistence agriculture to commercial the authorities (Figure 3.11a). Even among agriculture, or from agriculture to household nonagricultural wage earners, informal enterprises operating in industry and working conditions prevail. In 2011, about services but still under informal forms). five in six wage nonagricultural wage workers The main concern is raising productivity were informally employed. In fact, the net across the board in informal as well as expansion of wage work between 2007 and formal enterprises, and ensuring that social 2011 appears to have been almost exclusively protection and labor policies can help all based on informal sector jobs. The level of workers (regardless of whether they are informality is highest among services sector wage-employed or self-employed) manage risks. Figure 3.11: Informality is high, even among wage workers a. Percentage of self-employed/household enterprise workers b. Percentage of informal wage workers (not participating in in unregistered enterprises the National Health Insurance System) Private 96% Self -employed; 84% non -agriculture Public 74% TOTAL 83% Services 93% Self -employed; 96% agriculture Industry 82% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Estimates based on GHS 2011. 10 For example, Aterido and Hallward-Driemeier (2010) find that poor investment climate has a less negative effect on employment growth in Sub-Saharan Africa than elsewhere, but results in a comparative increase in employment growth among microenterprises—generally lower-productivity, less sustainable jobs. 24 Box 3.2: What is informality? The concept of informality, though widely used and discussed, is difficult to define—let alone estimate. By informal employment, this report refers to employment in the production of goods and services that are in themselves legal, but where compliance is absent or incomplete on some legal aspects of employment or production. Although informality tends to be a feature of small firms, it is a continuum. As shown in Benjamin and Mbaye (2012), there are large firms in West Africa whose operations are legal but informal in that a vast share of their accounts are underreported. Here, informality is defined in terms of the type of enterprise (self-employed, for example) as well as employment conditions (notably access to social security among wage workers). Unfortunately, for Nigeria there is no one consistent source of data to arrive at a global number for informal work, incorporating both of these dimensions. Information on enterprises is available in the panel component of the GHS 2011 and 2013 surveys. Information on employment conditions is only available in the GHS cross-section surveys. Informal enterprises are here defined as the self-employed (own-account workers, unpaid family workers, or employers) who work in enterprises, whether in agriculture or nonagriculture, that are not registered with the authorities. In Nigeria, where subsistence farming dominates, and where most nonfarm household enterprises are home-based, small-scale activities, this situation tends to result from the small-scale nature of the activities rather than from an active choice to avoid working within the legal framework. Using this definition, virtually all of the agricultural employed, and almost all of those in nonfarm household enterprises, are informal in Nigeria. Informal wage workers refers to workers who do not enjoy regularized work status. In the GHS, information is limited to whether wage workers have access to health insurance through their job as mandated by law. Those who do not are considered informally employed. Based on these assumptions, the rate of informality is 84 percent in nonfarm employment in Nigeria. This is slightly higher than the informality share derived in Adams, Johansson de Silva, and Razmara (2013), where, using an approach similar to that taken in the 2004 Nigeria Living Standards Survey, the informality rate is estimated to be 73 percent in the nonfarm sector. 25 4 Moving Into Productive Work 26 4. Moving Into Productive Work Nigeria’s workers still depend on jobs School-to-work transitions are that provide too little output or income. slow and incomplete For Nigeria’s economy to provide more Ensuring mobility into good—or, at least, productive jobs that offer higher earnings and better—forms of work is particularly contribute more to economic development, important for young people. They look for there would need to be a demand for the a first job experience that will set them on products and services those jobs produce. In a good and growing income path, while addition, workers would need to be available avoiding “low earning traps” through which and able to move into sectors, occupations, a low-pay job can limit a worker’s future and firms that provide such employment. earning potential. What is important for How people move into work and between young people matters greatly in Nigeria, jobs, over time and across generations, are where the median person is 18 years old, and key aspects in the transition of a country’s where three out of five adults (between 15 labor profile. and 64 years old) are under 35 years of age. This section focuses on labor mobility—the Outcomes differ greatly among young people transitions between school, employment, and depending on their family background, joblessness, and between different jobs that gender, and location. Young people in offer new opportunities. Viewed from a life- Nigeria today have higher levels of schooling cycle perspective, starting off in a low-paid than previous generations, and they are activity may be less of a concern if there is a more likely to be better informed about possibility of moving up to better earnings available opportunities and options. But their and working conditions over time. Similarly, expectations about job outcomes and their leaving employment for a period of time may disappointment in case of failure may be be a less serious problem if the chances of higher as a result. finding a new job are high. If, by contrast, Job prospects are uncertain for young patterns of employment are determined early people. Nigeria’s youth are, as shown in and many people are locked into low-income Section 1, even more worried about poor job activities without opportunities for change— prospects than the rest of the population. owing, for example, to family circumstances, And they have reason to be. Young people’s gender, location, or lack of networks, factors transition from school into working life is that are unrelated to talent or effort— not straightforward. Despite having more workers’ options are unequal from the outset. education than previous generations, the The extent to which circumstances drive current generation of young people is finding opportunities is likely to shape the degree of it difficult to secure a first job. In 2009, more trust in society’s fairness and, to some extent, than half of unemployed young people (57 the degree of social cohesion. Understanding percent) were first-time job seekers and had the patterns of mobility can help understand never held a paid job.11 Based on 2011 survey the extent to which there is inequality of data, unemployment was highest among opportunities (World Bank 2012) and identify young people, at 14 percent for active 15–24 bottlenecks in transforming work in Nigeria. year-olds, compared to 5 percent for adults The section is based largely on the panel 25–64, and had increased from 10 percent in component of the 2012/2013 GHS. 2007. An even larger share of young people (15 percent) was inactive—neither working nor in school. When employed, they were more likely to work in subsistence activities, agriculture in particular, than older workers. 11 This question was only asked in the 2009 round of the GHS. 27 Transition from school into productive work Transition to productive is slow, or does not happen. This is a pattern employment is delayed by too- found across Africa (Filmer and Fox 2014). early entry, slow progress in By the age of 20, only one-third of young school, and early family formation people are working; this share increases to half by age 25 (Figure 4.1). Many young Underprivileged youth start working early. people remain in education and training Many children in Nigeria drop out of school well into their 20s, but one-quarter of young along the way. Out of all primary-school- people ages 15–24 are not in employment, age children, 35 percent are not in primary education, or training. Women and girls are (or secondary) school (UNESCO Institute more likely to be inactive than men and boys, for Statistics 2014). Early dropouts attain at all ages. Moreover, it is not guaranteed insufficient levels of even basic skills, such as that workers will move into better job literacy and numeracy, and have to work to opportunities as they age. Women workers, survive and contribute to household income. in particular, are less likely to move into From this perspective, the early transition into nonagricultural wage work over time but employment delays or precludes later moves more likely than men to move into nonfarm into more productive employment. Child household enterprise work. labor remains an important phenomenon in Nigeria, involving an estimated 30 percent Figure 4.1: Transition from school to work is incomplete, especially for women a. School and work transition, women, ages 10-35 b. School and work transition, men, ages 10-35 100% 100% 90% Work and School 90% Work and School Work only Work only 80% 80% 70% 70% 60% 60% 50% School only 50% School only 40% 40% 30% 30% Not in 20% Not in employment, 20% employment, education or 10% 10% education or training training 0% 0% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Age Age c. Transition to job opportunities, women, ages 10-35 d. Transition to job opportunities, men, ages 10-35 100% 100% Non -farm wage Non -farm wage 90% 90% 80% Non -farm 80% household School only Non -farm 70% Farm work enterprise 70% Farm work School only household 60% enterprise 60% 50% 50% 40% 40% 30% 30% Not in 20% employment, Not in 20% education or employment, 10% training education or 10% training 0% 0% 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Age Age Note: These are cross-sectional data (examining different cohorts at one point in time) and should not be interpreted as panel data (which trace one cohort over time). Source: Estimates based on GHS 2012/2013. 28 of children ages 5–11 (Box 4.1). Children’s income for their families, or because dropouts employment in Nigeria is overwhelmingly in have no option but to work in agriculture. agriculture, although it is not clear whether What is clear is that these are the children this is because poor children in rural areas who become trapped in low-productivity are more likely to drop out to help provide employment. Box 4.1: Many children in Nigeria work Child work is prevalent in Nigeria, as it is all over Africa, and provides important contributions to family income. Household survey data show that almost 20 percent of Nigerian children between the ages of 5 and 14 are working, in that they are involved in an economic activity. Although some children in Sub-Saharan Africa are exposed to extreme forms of child labor, with psychological and physical scarring (including sex trafficking, soldiering, and mining), most participate in other forms of work—a vast majority of them on the family farm or in a nonfarm household enterprise (World Bank 2012). Conversely, although not all agricultural work is harmful to children, it may in some circumstances expose children to irreversible harm, including through unsafe tools, poisonous chemicals, dangerous animals, and extreme exhaustion (ILO 2006). Studies of child labor in four West African countries (not including Nigeria) show that children are exposed to dangerous conditions in their workplaces, including excessively heavy loads and night work (ILO 2014) Even beyond the more extreme and abusive forms of child labor, work conditions—such as long hours—that interfere with schooling and other aspects of human development can have detrimental consequences over the long run. Work obligations may prevent some children from progressing satisfactorily through school and thus lead them to drop out (Filmer and Fox 2014). In Nigeria, children’s employment is largely in agriculture, even in urban areas, and mostly for the family farm. Compared to other countries in the Economic Community of West African States, the share of children in employment only is low (8 percent of all children ages 5–14) but those who are in school and work combined form a relatively high share (27 percent). Children work long hours on average, nearly a full working week, at over 30 hours per week (ILO 2014). Child labor in Nigeria—an international comparison Based on the ILO approach, the term child labor is not synonymous a. School and work transition, women, aged 10-35 with child work, referring instead to 45 children’s excessive involvement in 40 work, including household chores. 35 For children ages 5–11 years old, this is defined as involvement in 30 any form of economic activity or in % children aged 5-14 25 household chores for 28 hours or 20 more during the week; for children ages 12–14 years old, it is defined 15 as involvement in an economic 10 activity (excluding those in light 5 work for fewer than 14 hours per week) or in household chores for 0 Swizaland Botswana Mauritania DRC Senegal Mali Guinea-Bissau Burkina Faso Guinea Cameroon Gabon Gambia Liberia Mozambique Nigeria Uganda Sierra Leone Chad Burundi Cote d’Ivoire Ethiopia Madagascar Togo CAR Rwanda 28 hours or more during the week. Using this approach, cross-country data from the MICS (which are not strictly comparable to the Source: Estimates based on NBS 2011c. household survey figures cited above) show that some 25 percent of children ages 5–14 were involved in child labor in Nigeria in 2011. This compares with around 20 percent in Liberia, Mozambique, and Mali, for example. Rural children are 50 percent more likely to be working than children in urban areas, which relates to the importance of agriculture. Children in poorer households are more likely than those in wealthier households to be in child labor, although the differences are not large. As such, lower inequality will not in itself reduce child labor significantly. 29 For young people who remain in school, married, compared to nearly 50 percent of academic progress can be slow. In fact, women. Earlier marriage brings pregnancies relatively high enrollment rates largely reflect and children at an earlier age. One in four the enrollment of overage students, high adolescent girls ages 15–19 has a child or is repetition, and slow progress through the expecting a child. Early family formation is education system. Although many 20-year- linked to young girls’ exit from school and olds are in school, most of them are still movement into economic inactivity, both of studying at secondary school. Access to which increase dramatically in the late teen post-secondary training is limited, with gross years. enrollment in tertiary education at about 12 The negative effects of early exit last percent in 2012 (World Bank 2014d). Slow throughout women’s working life. The share progress through school implies a lower of women who are inactive peaks at 35 accumulation of learning and competencies percent at the age of 25, but falls back only than age would suggest, and years of slowly. By age 35, one-quarter of women are foregone income in the labor market for still not in school or work, compared to less equivalent levels of education. than 10 percent of men. Women who leave Girls’ entry into work is also conditioned school early and move straight into inactivity by early family formation. Girls’ enrollment are likely to face steeper barriers to working is lower than that of boys at all ages, but later in life. The propensity for early family the gap in schooling and outcomes begins formation is also strongly correlated with to widen more significantly at age 17 and wealth. One in two girls ages 15 to 19 from beyond (Figure 4.2a). However, girls do not the poorest 20 percent of households12 are become employed when leaving school: married or in a union, compared to less than a 17-year-old girl is less likely to be in 3 percent of those from the richest 20 percent employment, education, or training than a of households. In rural areas, one-quarter of boy. Instead, girls marry much earlier in life women ages 20–24 were married before the than men do (Figure 4.2b). At the age of 20, age of 15 (NBS 2011c). less than 4 percent of men are or have been Figure 4.2: Girls leave school to marry earlier and often do not enter into working life a. Girls vs. boys not in employment, education, or training b. Family formation by gender and age 40% 100% Percentage not in employment, education or training 35% 90% 80% 30% Percentage ever married 70% 25% 60% 20% 50% 15% 40% 30% 10% 20% 5% 10% 0% 0% 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Age Age Girls/Women Boys/Men Girls/Women 2011 Boys/Men 2011 Source: Estimates based on GHS 2011. 12 This figure refers to the wealth index calculated in the MICS, which is not the same as the official poverty line referred to elsewhere in the report. 30 Circumstances unrelated to talent or effort, and childbearing are significant factors, other such as gender, household income level, cultural elements also constrain women’s and location of residence, are significant role in the labor market. For example, social determinants of a person’s job trajectory. norms or security concerns may prohibit Women are penalized in labor markets women from taking work in public places or from all perspectives: compared to men work that requires traveling (Filmer and Fox they are less likely to be active, more likely 2014). Women are more likely than men to to be in lower-earning occupations like lack access to land for farming or to use as farming and informal jobs, and earn less for collateral for credit (Box 4.2), limiting their a given level of education and experience options with regard to expanding businesses. (approximated by age). While early marriage Box 4.2. Does the legal system empower women in Nigeria? Women account for 34 percent of wage employment and 60 percent of self-employment in the nonfarm sector in Nigeria. Yet women in Sub-Saharan Africa often operate firms with less potential for profits than do men: smaller, informal firms in sectors with lower earnings. Productivity differences are due largely to the kind of firms and sectors in which women work, however, rather than to any gendered differences in entrepreneurship per se. There is a need, therefore, to improve the investment climate for these women, including access to skills and finance to develop their firms. Often overlooked in this regard are laws and customs related to marriage, divorce, inheritance, land rights, and labor. These laws, and whether and how they are applied, influence property rights and women’s legal capacity to make decisions for themselves. This, in turn, affects women’s economic opportunities, including for entrepreneurship—through, for example, their right to work outside the home, to open bank accounts, and to access property for use as collateral. Recognizing this, the Women’s Legal and Economic Empowerment Database for Africa (Women LEED Africa) compiles information on the formal property and legal rights of women and men, based on constitutions, international agreements, statutes, and case law. This information sheds light on women’s ability to enter into contracts or own, administer, transfer, or inherit assets and property, including land. Many of these rights are related to marital status; in many countries, women cede economic rights to their husbands upon marriage. Conversely, where women’s rights in these areas are stronger, they are more likely to develop larger enterprises and become employers. Nigeria’s constitution recognizes the principle of nondiscrimination, but does not explicitly provide for gender equality in property rights. Moreover, legal exceptions directly or indirectly limit women’s economic freedom. In terms of legal capacity, Nigeria is better at recognizing women’s equal rights than many African countries: men are not formally recognized as heads of household, and a woman does not officially need her husband’s permission to open a bank account or to work outside the home. However, women’s land rights are not granted statutory protection under land laws and customary land is exempt from succession. As employees, women are in principle guaranteed the right of nondiscrimination, but they are not allowed to work in certain industries and the number of hours they can work is restricted. Although these regulations are intended to protect women, they may work against their earnings potential or contribute to informal working conditions. In addition, Nigeria is a legally pluralistic country, where the common law system coexists with customary law derived from traditional norms and practice, as well as religious (Sharia) law used in some Muslim communities, especially in the north. While there are official customary courts in Nigeria, informal customary courts that are not officially recognized by the state also continue to operate. Under customary law, a widow can be denied the right of inheritance and is thus not empowered to administer the estate (instead, she is considered part of the inheritance). Unlike in most African countries, the Nigerian constitution does not explicitly limit religious law from discriminating based on gender. In many areas, Sharia law includes provisions to protect women’s rights such as owning property, working outside the home, keeping profits, or entering into civil transactions. However, the interpretation varies according to different schools and contexts. Owing to a lack of awareness and/or social norms, women’s rights may not be applied in practice even if religious law would support them. Source: Hallward 2013; Hallward-Driemeier and Hasan 2012; Hallward-Driemeier and others 2013. 31 Table 4.1: Intergenerational mobility is limited Employment conditional upon father’s sector of employment, ages 15–64 Child's sector of employment Memo: share of total Agriculture Industry Services employment, father's generation Father's sector of Agriculture 50 10 40 72 employment Industry 17 14 68 22 Services 15 11 74 6 Memo: share of total employment, 41 11 48 child's generation Source: Estimates based on GHS-Panel 2012/2013. Family background influences mobility. Partly the Lagos-dominated South West region. as a result of the slow transformation of the In other areas of the country, mobility into employment structure, job opportunities are more productive work has been low in the still conditioned on family background and aggregate. Given the lack of data, it is not workers in Africa today often end up working possible to trace an individual’s propensity to in the same type of job as a parent (Filmer access more productive work over a longer and Fox 2014). In Nigeria, intergenerational period of time. While mobility may be slow, mobility is limited for those whose father the information available shows that some worked in agriculture: one in two children people move in and out of employment, and whose father worked in agriculture are between different types of jobs, between themselves working in agriculture (Table seasons and over a few years’ time. 4.1). For a person whose father worked in The dominance of farm work implies that a industry, the chances are much higher that he large share of the population experiences or she will be working in services, however. significant seasonality in employment These are raw job transitions, not taking into patterns, depending on whether work is account the impact of age or education on needed to prepare, plant, or harvest land. jobs (although, as discussed below, access Panel data on individuals’ employment in to education also depends largely on family the post-planting (October–November) and background and location in Nigeria, further post-harvest (February–March) seasons show cementing inequality at birth). However, that the post-planting season is more intense the persistence of this phenomenon across in agricultural work than the post-harvest generations suggests that children from season (Figure 4.3a). While many workers less favorable circumstances in Nigeria, in maintain the status quo throughout the particular those whose father worked in year, about 20 percent of those who worked agriculture, have fewer opportunities to in agriculture in the post-planting round improve their lot. Job trajectories are in other find themselves inactive or unemployed in words determined largely at birth: by family the post-harvest season. Most movement background, gender, and access to education. is between inactivity and work, however, Short-term job mobility rather than between different types of work: only 8 percent of farm workers were doing Recent years have seen some changes in nonagricultural work in the post-harvest Nigeria’s employment structure, including season. This is consistent with recent an increase in wage work between 2007 and research showing that mobility between 2011. Job creation dynamics have differed self-employment and other forms of work significantly across Nigeria, however, and in developing countries is limited and there have mostly benefited the population in is more mobility between employment and 32 inactivity (Cho, Robalino, and Romero 2014). mobility is limited over time. Panel data are It is worth noting that the high number of only available for two years (2010/2011 and those who hold multiple jobs, together with 2012/2013), which may be too short a time the focus on primary jobs in the surveys and to evaluate people’s opportunity to move this analysis, are likely to lower the estimates into better jobs. Three out of four adults who of changes in employment patterns, as were inactive or unemployed in 2010/2011 people holding secondary jobs may ramp up remained jobless in 2012/2013, while one in engagement in those during the low season four were working. Of those involved in farm of their primary jobs, without considering it a work in the first year, nearly 70 percent were shift in employment. still there. More vulnerable groups—youth, women, and those with little education—were Young people move between school and more likely to transition between employment work, and between different forms of and inactivity and unemployment, and joblessness and work. Almost 30 percent less likely to move between different types of young people who were working in of jobs, than other groups. Although, agriculture in the post-planting season again, a two-year span is a short time in (which coincides with school holidays) are which to evaluate mobility, the patterns back in school in the post harvest season are consistent with longitudinal data from (Figure 4.3b). The unemployed—who, again, Uganda and urban Tanzania that suggest are overrepresented among young people significant persistence in job opportunities, compared to other groups—also shift especially for those in farm work. A majority significantly. In fact, less than half of those of Ugandan young people ages 20–29 who were unemployed in the post-planting remained in their occupations over a five- season are still unemployed in the following year interval, especially those in agriculture. season. Nearly 40 percent of them are either In urban Tanzania, movement between wage in school or working. This suggests that, at work and household enterprise work was least for young people, unemployment and limited over time (Filmer and Fox 2014). In inactivity may have a significant seasonal other words, it is family, location, gender, aspect. Transitions from agricultural to and school circumstances that determine a nonagricultural work are much more limited, person’s transition into good or less good job however, at 4 percent. opportunities. Once on the job, there is less Barring seasonal variations, occupational likelihood of change. Figure 4.3: Seasonal labor market mobility (post-planting and post-harvest), 2012/2013 a. Employment status post-harvest, conditional on status b. Employment status post-harvest, conditional on status post-planting, 2012/1013, all ages 15–64 post-planting, 2012/1013, youth ages 15–24 100% 100% 1% 2% 8% 8% 4% 11% 14% 90% 4% 90% 6% Employment status, post harvest Employment status, post harvest 80% 7% 80% 6% 70% 70% 55% 68% 60% 60% 41% 72% 86% Non-ag work 50% Working non-ag 50% 97% Ag work 88% Working ag, 40% 1% Unemployed 40% 76% Not working 13% Other inactive 30% 5% 30% 21% 3% In school 20% 20% 14% 27% 3% 10% 17% 10% 19% 10% 11% 0% 0% In school Other Unemployed Agr work Non-agr Not working Working ag, Working non-ag inactive work Employment status, post planting Employment status, post planting Source: Estimates based on GHS-Panel 2012/2013. 33 Moving for work: patterns of expenses while looking for work, and moving migration expenses. Labor-related migration—seasonal and Migration is a limited phenomenon in Nigeria permanent, from rural to urban areas, and and occurs mostly between different localities to countries abroad—is part of the jobs and regions within the country. GHS-Panel landscape in Nigeria. As in many West African survey data shed light on the likelihood that countries, a multitude of factors influence a person interviewed in 2010/11 will have migration, including climatic conditions that moved out of the dwelling by 2012/13 and force agricultural workers to look for land the reported reason for that move. Between elsewhere, conflict and violence that drive 2012 and 2014, a vast majority of workers (86 people out of a particular area, and emerging percent) did not leave their households’ local labor and skills deficits and accompanying community. To the extent that labor migration job opportunities in urban growth poles. happens, it is largely internal: about 8 percent International migration from Nigeria has of the working-age population left their been facilitated by porous borders with household to move to another state within neighboring countries and the establishment, Nigeria. Of these, 30 percent had left to look over time, of a significant diaspora both for jobs elsewhere, with another 30 percent elsewhere in Africa and in the United States. leaving to look for better land. Less than 1 Yet the poorest groups are not usually percent left to move outside Nigeria. represented among migrants, as resources There is no recent comparable data detailing are needed to cover travel costs, living migration abroad. Data on migrant stocks in recipient countries, based on census data, are Figure 4.4: Labor market mobility 2010/2011 and 2012/2013 so far only available for 1990–2000 (Figure a. Employment status in 2012/2013, conditional on status in 2010/2011, all ages 15–64 4.5). These data show that the number of 100% international migrants from Nigeria increased 90% 18% 16% between 1990 and 2000, most significantly among those with a tertiary education: in Employment status in 2012/2013 80% 7% 70% 1990, this group made up 22 percent of total 60% 78% emigrants, but by 2000 had increased its share to 35 percent and doubled in absolute 50% 69% Working non -ag Working ag, numbers. Although skills gaps are emerging 40% 75% Not working 30% 20% 8% in some fast-growing African countries, the 10% 15% 14% geographical profile of migration and skills is 0% clear. Migrants to other African countries are overwhelmingly low-skilled workers, while Not working Working ag, Working non -ag Employment status in 2010/2011 b. Employment status in 2012/2013, conditional on status in migration of those with a tertiary education 2010/2011, youth ages 15–64 was concentrated in two English-speaking 100% 8% 12% nations: the United States in particular, but also the United Kingdom. Thus, while a vast 90% 18% 21% 9% Employment status in 2012/2013 80% 3% 70% 19% 9% 4% 5% 62% majority of the population works in low-skill 60% 20% 47% jobs in agriculture and household enterprises, there is a set of highly educated persons who Non-ag work 50% Ag work 48% 40% 27% 3% 5% Unemployed Other inactive appear to be competitive on international 11% 30% 61% 5% In school labor markets. 20% 17% 27% 27% 10% 21% 11% 0% In school Other Unemployed Agr work Non-agr inactive work Employment status 2010/2011 Source: Estimates based on GHS-Panel 2010/2011 and 2012/2013. 34 Helping the transition into better new types of skills. Moreover, building jobs: the role of skills a skilled workforce is a cumulative and Many factors, including skills, affect time-consuming process that depends on employment productivity and workers’ many years of good-quality schooling. It is upward mobility. Factors that influence firm therefore imperative for Nigeria to build the performance and earning potential are access foundations now. to finance, infrastructure, and an investor- Even in developing countries like Nigeria, the friendly business climate, as well as the level skills content of occupations is increasing, of human capital possessed by workers, placing new demands on workers. Given including skills that are relevant for jobs. the importance of farm work, manual skills Skills deficits are not a key bottleneck cited still dominate the Nigerian world of work. by Nigerian firms in surveys, as compared, However, recent years have seen a small for example, to unreliable electricity and but noticeable shift toward more intensive transport infrastructure (World Bank use of nonroutine cognitive (analytical 2014a).14 There is nonetheless a common and interpersonal) skills—especially in the understanding that modernizing economies southern regions, where job markets have undergoing structural transformation need changed. Increasing emphasis on “new economy skills” across occupations has been Figure 4.5: International migration is increasing and the observed in more-developed countries and share of educated migrants is on the rise regions (Acemoglu and Autor 2010). Nigeria a. Nigeria: migrants abroad by region of residence and is moving in this direction, although from a education level, 1990–2000 lower level (World Bank 2014d). Good-quality basic education is a 350 300 fundamental requirement for skills 250 development. Skills that are relevant to Thousand people 200 labor markets are not synonymous with 150 education. Skill is the ability to perform some function (or specific job) that comes from knowledge (which can be acquired through 100 50 education), but also practice and aptitude. 0 Africa United United States Other OECD Other Tot less edu Tot college Yet basic education is—ideally—an important Kingdom stepping-stone to acquiring most types of job skills, as it should develop foundational skills 1990 2000 b. Nigeria: migrants abroad by education level and place of like literacy and numeracy, build noncognitive residence, 2000 skills, and familiarize students with learning situations (Adams, Johansson de Silva, and 250 200 Razmara 2013). Thousand people 150 100 50 0 Africa United Kingdom United States Other OECD Other Less education College Source: Estimates based on Artuc and others 2012. 14 In addition, enterprise survey results must be evaluated against the fact that they do not take into account informal firms or firms that were never created due to lack of skills or other constraints. 35 Education levels remain quite low in Nigeria, Poor people have less access to education. however. Primary-level net enrollment Poor children in Nigeria (ages 7–17) are (as measured by the share of children of several times more likely to be out of school primary school age who are enrolled in than those from wealthier families. In the primary school) has stagnated at around 60 2011 post-harvest season, 24 percent of percent. At the same time, there has been an children in the two poorest consumption expansion at secondary levels. Together, these quintiles were not in school, compared trends have polarized access to education, to 12 percent for those in the three richer with peaks in schooling at the low and high quintiles; by 2013, the share of poor children end. Overall, however, 30 percent of young who were out of school had increased to 29 people still have no more than a primary percent. The significant geographic divides education, and 15 percent have no education permeating Nigeria’s socioeconomic map at all (Figure 4.6). are also reflected in schooling. Out-of-school children live predominantly in the North East Figure 4.6: Education levels have increased, but many and North West, and a majority of them have youth still have no post-primary education never attended school. The gender gap in Distribution by highest level of education achieved and age group, 1999, 2007, 2011 schooling is also more significant in these regions (World Bank 2014d). 100% 90% Limited access is compounded by poor 80% quality of education, which explains the slow progress in school discussed above. Access 70% 60% 50% to school is not sufficient; it is critical that the 40% school provide real learning, but this is far 30% from guaranteed. The quality problems are 20% evident in alarmingly low levels of basic skills: although self-reported literacy rates are high, 10% 0% 1999 2007 2011 1999 2007 2011 when tested 60 and 44 percent of students, after completing grade 4 and 6 respectively, 15-24 25-64 Below primary Primary Below senior secondary Secondary Post-secondary Source: Estimates based on GHS 1999, GHS 2007, and GHS cannot read a complete sentence (World 2011. Bank 2014d). Early dropouts from school are, from this perspective, highly problematic, as they are leaving without even the basic foundations of schooling in place. There are significant regional differences in the quality of education offered across Nigeria: only 5 percent of primary graduates from Abuja are illiterate, compared to over 35 percent in Zamfara and Nassarawa in the north (Figure 4.7). 36 Figure 4.7: Illiteracy rates after completing primary school 40% 35% 30% 25% 20% 15% 10% 5% 0% Zamfara Nassarawa Cross River Kwara Bayelsa Delta Ogun Kano Borno Kogi Imo Plateau Rivers Adamawa Lagos Abia Edo Taraba Gombe Anambra Ebonyi Jigawa Benue Bauchi Niger Ondo Ekiti FCT Abuja Osun Enugu Akwa Ibom Yobe Kaduna Katsina Kebbi Oyo Sokoto Source: World Bank 2014d. Access to education is constrained on both than 10 percent of registered students pass the supply side and the demand side. In (World Bank 2014d). the 2012/2013 GHS-Panel Survey, the most The combined result is that many actual common self-reported reason, by far, for and potential workers, even young ones, children who had never gone to school was lack basic literacy, numeracy, cognitive, and “lack of interest in education” (40 percent). noncognitive skills, and it is highly likely that Education may be seen as unnecessary skills deficits limit productivity growth in both for agriculture or self-employment jobs (a the formal and informal sectors. High illiteracy demand-side issue) or the poor quality of rates among farm workers (41 percent) are education makes it unattractive to invest in likely to keep farming households from children’s education (a supply-side problem). adapting new technology. Farmers with more The high level of dropouts throughout basic education are more likely to adopt modern education is likely to reflect a mix of distrust methods, use inputs efficiently, adapt to in a failing education system and failure to market changes, and respond to natural learn, compounded by high direct costs of calamities more rapidly (Filmer and Fox 2014). books and other materials and the indirect Illiteracy is also preventing farmers from opportunity costs of schooling given the diversifying into more profitable occupations, need to contribute to household income. such as low- and mid-value-added services, The benefits of expanding access to where illiteracy rates are below 24 percent. secondary education are similarly pulled Those who do have an education tend to down by poor quality. The two most common work in the public sector. In spite of low secondary-level exams are the National overall access to post-secondary education Examinations Council and the West African in Nigeria, a majority (57 percent) of public Senior School Certificate Examination. sector workers have more than a secondary Both indicate low passing rates for Nigeria, education. These numbers stand in stark especially in the northern regions where less contrast to private sector employment, 37 where 49 percent of workers have not even More work is needed to understand the completed primary school (Figure 4.8a). It causes and effects of this skewed distribution follows that most of the educated workers of skills. Do generous working conditions in are, in fact, concentrated in the public sector, the public sector, supported by oil revenue, in spite of its relatively small size, and this attract workers, or is it low demand for share has increased over time. As many educated labor in the private wage sector as 87 and 49 percent of those with senior and rising unemployment rates for highly secondary and post-secondary education, educated youth that impel the public sector respectively, work in the public sector (Figure to act as an employer of last resort? If it is the 4.8b). former, are private firms finding it difficult to compete for those with higher education? Figure 4.8: Workers with higher levels of education find public employment Education pays off in higher wages. For those a. Distribution of public and private sector employment by in wage work, multivariate analysis shows that level of education education yields positive returns in terms of 100% 3% 6% 10% wages when accounting for other worker and job characteristics such as gender, age, sector 2% 90% 16% 7% 1% 11% of work, and location. The payoff to education 80% 41% 7% 70% 59% 57% 29% 60% 22% 30% starts only beyond primary levels, however. 50% Moving past the secondary level is also 40% 32% important, as the payoff to tertiary education 30% 8% 25% 27% 53% 57% 49% is double that of secondary education. Worker and job characteristics matter, too: 20% 12% 4% 3% 10% 7% even when industry, age, education level, 7% 8% 4% 6% 0% 1999 2007 Public 2011 1999 2007 Private 2011 and similar factors are taken into account, Below primary Primary Below senior secondary Senior secondary Post-secondary men earn more than women. As such, being a man pays off roughly as much as having b. Share of public sector in total employment, by level of education a secondary education, all else being equal. 100% Older workers earn more than young ones, 90% 87% and those based in Lagos enjoy a significant 80% premium over other urban and rural areas. 70% There is a significant and separate public 60% 55% 54% sector wage premium, supporting the notion that these jobs are highly coveted by those 49% 50% 46% 40% with education. 30% 20% 15% 13% 9% 8% 8% 10% 5% 5% 4% 1% 1% 2% 2% 3% 0% 1999 2007 2011 Source: Estimates based on GHS 1999, GHS 2007, and GHS 2011. 38 In Nigeria, as in many other Sub-Saharan For young people with a tertiary education, African countries, direct labor market training the National Youth Service Corps (NYSC) is limited. Total enrollment in vocational provides a bridge between school and and technical education and training is low work. The NYSC is a one-year compulsory compared to academic education, both at national service program that places secondary and tertiary levels. Traditional university graduates in organizations and apprenticeships are a common form of skills businesses that are relevant to their area development for jobs in Africa, but even of study. Participants work in rural areas this highly practical form of training requires in sectors such as agriculture, health, some basic skills in literacy and numeracy. education, and infrastructure. There is an In Nigeria, apprenticeships appear to serve ongoing debate about the extent to which mostly as an entry ticket into the informal the NYSC contributes to employability and nonagricultural sector, but they do not is still relevant (Box 4.4). Policy dialogue is increase productivity or earnings. (Box 4.3; underway to reposition the NYSC to focus Treichel 2010; Adams, Johansson de Silva, and more on providing job-relevant experience Razmara 2013). and building vocational and entrepreneurial skills. Box 4.3: Skills development in Nigeria’s informal sector Earnings and skill levels differ a great deal between the informal and formal sectors. Compared to formal workers, informal workers are less literate and numerate and have much less formal schooling. They earn less and education has a smaller payoff for earnings. Investment in skills is cumulative, and those with higher levels of education continue to be formed through on-the-job training opportunities throughout their working life. While more children than ever access basic education, one in four primary school students never graduates and progression to secondary remains low. Formal technical vocational education and training is limited, but private institutions absorb some of the excess demand for training. Informal apprenticeships remain the most important form of skills development for the informal sector, but are not associated with higher earnings. Source: Adams, Johansson de Silva, and Razmara 2013. Box 4.4: The National Youth Service Corps in Nigeria The NYSC is a national service scheme for university graduates focusing on community development and funded by the federal government. The NYSC was established in 1973 with two principal goals: (i) fostering national unity, national patriotism, integration, and ethnic tolerance following the civil war of 1967–1970; and (ii) redistributing skilled labor across the country, including to rural and poorer states. About 250,000 graduates are mobilized annually. During their assignment, NYSC youth are placed in rural settings in sectors such as agriculture, health, education, and infrastructure, where they are expected to mobilize resources to achieve improvements. They are offered courses to increase employability after completing their service. The scheme is compulsory for all university graduates under the age of 30, and by law no employer (public or private) can give a Nigerian graduate a job without provision of an NYSC completion certificate. The NYSC been restructured several times to adapt to labor market needs and increase participants’ employability. In particular, an entrepreneurial development program has been introduced to encourage self- employment, together with a credit component. The NYSC program is under criticism for lacking relevance, especially with regard to labor market insertion, for producing few viable businesses, and for serving as poor compensation for the lack of technical, writing, or on-the-job skills needed to successfully find a job. The opportunity cost of NYSC, which provides living expenses and salary for 12 months, compared to other forms of employment and community development services needs to be evaluated. 39 5 Fostering Jobs That Are Good For Development 40 5. Fostering Jobs That Are Good For Development What does the future hold for jobs in Nigeria? productivity, especially in smallholder The country’s economy has become more farming, which can also help set off strong diversified and less dependent on agriculture rural dynamics in off-farm employment. and mining resources, but the employment Bringing more girls into education and structure has not followed suit. Demographic productive employment would contribute to pressures indicate the need to create 40 higher family earnings, and may also have to 50 million additional jobs between now positive effects on fertility and children’s and 2030. The diagnostics included in this education and nutrition. Spatially balanced report show that both new and existing investments that provide opportunities in jobs, whether in agriculture or other sectors, the poor northern regions, especially for will need to be more productive to help young people, would be likely to help reduce the population move out of low-earning sources of conflict, as would efforts to further employment and poverty. Transforming diversify sources of economic growth, both Nigeria’s employment structure will thus geographically and sectorally. entail promoting more labor demand and Nigeria’s dynamic economic development opportunities for entrepreneurship in the in turn yields opportunities to strengthen “better jobs sector” by working to develop the country’s employment profile. Nigeria is a more competitive formal sector, helping now Africa’s largest economic power. Aside workers strengthen their skills, supporting from its considerable natural resources, the Nigerians in starting and developing more contributions of manufacturing industries, productive nonfarm enterprises, and raising information and communications technology productivity in agriculture, where a large (ICT), and entertainment services to recent share of the population will continue to work economic growth show the significant over the coming decades. potential for entrepreneurship, innovation, The transformation of Nigeria’s employment and economic dynamism. Natural resource landscape will need to address key rents could be harnessed to promote much- development challenges in the country. needed investments in skills and other Reflecting back to the discussion in Box 1.2 on productivity-enhancing areas and to continue the World Development Report 2013, making to build the foundations for broad-based progress on the jobs agenda will require growth. attention to the existence of a large agrarian Against this background, this section sector within an urbanizing economy, discusses challenges and opportunities for the spatial inequalities the result from the future of jobs in Nigeria. It highlights the concentrated growth in megacities, the role demographic developments that condition of conflict-affected regions where joblessness the number of jobs needed to provide may exacerbate tensions, the persistent employment for a majority of the population, gender disparities in employment and the regional and sectoral growth patterns education, and the challenge of harnessing that are likely to determine where jobs are natural resource wealth to improve jobs. created and where they are needed, and the Some jobs do more for development than reforms needed to improve employment others. Although public sector employment outcomes. These are considered across has been a significant source of wage jobs, it Nigeria’s three main sectors of employment: is not sufficient over the long term—private agriculture, household enterprises, and the sector-led growth is needed. The government (private) wage sector. Opportunities for should focus on providing the conditions that increasing productive work in these sectors encourage the types of jobs that promote depend on: (i) the business environment in development, poverty reduction, and shared which they operate, including infrastructure, growth. Attacking poverty at its core would access to land, technology, and the legal require promoting higher agricultural and regulatory framework that sets the 41 boundaries for economic activity; and (ii) the dividend: more working adults are able to capacities of those who work there, including provide for fewer dependents, in particular their abilities, education, skills, networks, children, creating a strong positive force for and other factors that help them become economic growth and living standards. With more productive workers. Beyond fostering a strong demographic transition, Bloom jobs and incomes over the long term, given and others (2010) estimate that the Nigerian substantial poverty levels, there is also a economy in 2030 could be more than three need to minimize vulnerability in incomes times larger than it is today, compared to (and, as such, in consumption) over the short around twice as large under the default term. Finally, Nigeria needs better data in growth scenario. order to monitor employment outcomes and Nigeria, like many other countries in Africa, the impact of policies. These are all major has yet to benefit from a demographic areas of discussion, and it is beyond the window of opportunity (Canning and others scope of this study to offer specific sectoral 2015). As discussed in Section 1, the decline in policy recommendations. As noted in the fertility rates has stalled in the past 15 years introduction, the intention of this report and, as a result, Nigeria’s projected trajectory is describe the jobs situation broadly and differs greatly from that of developing highlight the agenda for a deep dive on regions outside of Africa (Figure 5.1). There policies that would follow. are also significant differences across regions. Many jobs are needed… Even if fertility rates drop rapidly at a speed similar to those in Asian countries in the past Will Nigeria’s demographic burden diminish 40 years, currently high levels suggest that any time soon? The rapid growth in wealth by 2050, Nigeria’s fertility rates will be at the and corresponding reduction in poverty in level of those of Asia in the 1980s. Because of many Asian countries has been associated high population growth in the past and still with their demographic transition. Their today, Nigeria will reach an opening of the experiences show that rapid increases in the demographic window by 2035 at the earliest, working-age population, if accompanied by even if population growth eases. falling fertility rates, can yield a demographic Figure 5.1: Nigeria’s fertility rates are and will remain high by any standard 8 Projections 2010 - 2050 7 Fertility rate % 6 5 WORLD Sub - Saharan Africa 4 Nigeria Nigeria: low fertility 3 Nigeria: constant fertility Asia Latin America 2 1 0 Source: Estimates based on United Nations 2013. 42 From the perspective of poverty reduction, expanding child population. Continued high sustained high population growth puts fertility rates imply that, for several decades significant pressure on Nigeria in at least to come, the working-age population is set two areas. First, it heightens pressure to to increase rapidly in absolute terms: by rapidly expand important areas of service some 66 million people between 2010 and delivery (such as education, health, and 2030, compared to an increase of 35 million social services) to accommodate coming people between 1990 and 2010 (Figure generations of children and youth and to 5.2a). In response, the Nigerian economy ensure maternal health, while simultaneously needs to create 40 to 50 million new jobs increasing the quality of these services. in that period—or more, depending on the Second, the economy needs to generate employment-to-population ratio (Figure enough jobs to absorb the millions of 5.2b). These numbers translate into over 2 additional workers entering the labor million additional jobs per year, to be taken market (World Economic Forum 2014). up mostly by new labor market entrants. More attention needs to be given to family Unlike in Asian countries, young and adult planning and other measures to lower fertility workers in Nigeria remain under high rates in order to turn demographic challenges pressure to provide for a rapidly growing into opportunities within the foreseeable child population. To help sustainably reduce future. poverty, therefore, new jobs need to be different from those in the past, offering Many new jobs will be needed just to keep better earnings and working conditions than up with the growth of the working-age are currently the norm. population, and to provide for the rapidly Figure 5.2: Working-age population growth implies that many new jobs will need to be created a. Increase in population (millions), by age group, recent past b. Additional jobs needed (millions), 2010-2030 and near future 120 18 3 16 100 26 14 12 80 15 10 Millions 2 Millions 60 8 12 25 10 6 40 13 4 20 44 2 27 0 0 2010 -2015 2015 -2020 2020 -2025 2025 -2030 1990 -2010 (estimates) 2010 -2030 (projected*) Constant employment -to -population ratio: 41 million jobs needed 0 -14 15 -24 25 -34 35 -64 65+ Increasing employment to population ratio: 47million jobs needed Source: Estimates based on United Nations 2013, using medium fertility assumptions. 43 … in urban and rural areas … are instead resulting in congestion, low Is urbanization driving development? Cities connectivity, and environmental pressures. can boost economic growth and job creation Urban poverty in Nigeria, while lower than by facilitating agglomeration economies, rural poverty, fell by only by 4 percent as economies of scale and network effects between 2004 and 2010 (World Bank 2014e). help firms reduce costs and foster innovation Urbanization levels are similar to those in (World Bank 2008). However, many much wealthier countries like Indonesia or countries in Sub-Saharan Africa—Nigeria China (Figure 5.3a). Yet unlike in Indonesia, among them—are not sufficiently reaping for example, where urban population shares the benefits of urbanization. Unplanned, are following a similar trajectory, Nigeria’s uncoordinated but massive urbanization urbanization has not coincided with a in the context of poorly functioning structural transformation out of agriculture markets for land, lack of basic services, into more modern activities (Figure 5.3b). poor infrastructure, and weak governance Figure 5.3: Nigeria is urbanizing rapidly, but the economy needs to modernize faster a. Nigeria and countries with similar urbanization rates but b. Nigeria and Indonesia: share of agriculture in GDP; share different income levels of urban population in total 60 60 10000 Agr share of GDP and urban share of total ppp (%) 9000 55 50 Urban population % of total 52 53 53 53 53 8000 51 52 50 50 GDP per capital (PPP) 50 49 48 49 7000 45 40 6000 40 5000 30 4000 35 3000 30 20 2000 25 1000 10 2006 2014 2312 2666 3368 4174 4339 4876 5019 5806 9083 639 20 0 0 1956 2001 2003 2005 2007 2009 2011 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 GDP per capita (PPP) % urban population NGA Agriculture NGA Urban pop % IND Agriculture IND Urban pop % Source: United Nations 2014. 44 Urbanization pressures are indeed massive urban areas are lower than those in rural in Nigeria. As noted above, Nigeria has one areas, but still remarkably high at nearly of the fastest-growing populations in the five children per woman, supporting the world. Since the 1980s, most of this growth notion of “within-urban” dynamics (World has been taking place in the cities, and the Bank, forthcoming). Second, urbanization is urban population more than tripled between to a significant extent driven by population 1980 and 2010—increasing by almost 2 expansion in large cities. By 2015, Nigeria million people per year. As of 2014, about 84 will have eight cities with populations over million people—nearly half the population— 1 million, encompassing some 28 million are living in urban areas, placing significant people in total. These patterns will intensify pressure on land, social services, and jobs. in the future (Figure 5.4b). There is evidence The population of Nigeria is concentrated that poverty reduction links more closely to in four distinct geographic nodes around rural diversification out of agriculture and the cities of Kano in the north, Lagos in the urbanization to secondary towns, than to southwest, Port Harcourt in the southeast migration to big cities (Christiaensen, De delta states, and, albeit to a lesser extent, Weerdt, and Todo 2013). the capital city of Abuja. These pressures will Poverty reduction may not be driven primarily intensify in the coming decades, as almost all by the growth of megacities, pointing to the population growth in Nigeria is expected to need for investments that promote spatially take place in its urban regions (Figure 5.4a); balanced growth. For resource-dependent by 2030, 60 percent of the population may be countries like Nigeria, urbanization may in urban areas. not result from a transformation of labor The lack of economic growth and poverty opportunities through a productivity push in reduction in parallel with rapid urbanization agriculture or through a pull from industrial implies that there are no automatic gains—it productivity growth. Although Nigeria’s is how and where urbanization takes place rebased GDP shows manufacturing to that matters for job opportunities and contribute a higher share than previously wealth creation. First, many developing thought, it is still less than 7 percent. Instead, country megacities are expanding on rents from resource exports increase account of natural population growth, domestic demand for urban goods and, rather than massive immigration from rural especially, nontradable services, without areas in response to new labor market increasing the share of manufacturing or opportunities (Jedwab, Christiaensen, and services in production or exports (Gollin, Gindelsky 2014). Fertility rates in Nigeria’s Jedwab, and Vollrath 2014). Poor people, who Figure 5.4: Urban areas, especially larger cities, will account for a large share of the population a. Nigeria, urban and rural population, estimates and b. Urban population by size of agglomerations projections 70 180 160 60 140 Urban population (millions) 50 59 Increase Millions 120 40 100 51 47 28 80 30 39 27 60 31 24 20 14 48 40 20 16 22 10 20 13 10 11 13 11 12 7 24 10 9 13 11 16 0 0 1990 2000 2010 2020 2030 1990 -2000 2000 -2010 2010 -2020 2020 -2030 Rural est Urban est Rural proj Urban proj 10 million or more 1-10 million 300000 -1 million Fewer than 300 000 Source: United Nations 2014. 45 often work in agricultural occupations, lack Even in the case of unprecedented high the means to migrate into the bigger cities and sustained growth in the nonagricultural where poverty may in fact be stagnating sector, the wage sector will not account due to the creation of slums. Instead, they for most jobs because it is growing from can move out of poverty by diversifying a small base. Asian countries have shown occupations and moving into smaller rural a tremendous increase in manufacturing towns (Christiaensen, De Weerdt, and Todo employment over the past two decades, 2013). Therefore, national and state policies reflecting strong growth in industrial output and investments need to trickle down to and high employment elasticity; in fact, larger and smaller urban areas to provide employment has been growing even faster better linkages between labor, production, than output. Under such circumstances, and consumption markets. In addition to how fast would the employment structure addressing congestion and other constraints be transformed in Nigeria? Estimates show to a more beneficial form of urbanization, that even if industry and services value- the policy focus needs to be broadened added were to grow by 10 percent per year to include opportunities in smaller urban and the employment elasticity of industry centers and rural diversification, by ensuring wage jobs—the jobs created for a given that there is no “metropolitan bias” in increase in value-added—were to mimic the the provision of public services, including increases seen in Asian “Tiger” countries, infrastructure. wage employment would expand by some 9 percent per year. … and mostly in agriculture and nonfarm household enterprises Yet by 2025, nearly twice as many people would still be working in the nonfarm Notwithstanding the rapid rate of household enterprise sector as in the wage urbanization, agriculture and small nonfarm sector. Under more normal but still favorable household enterprises in both rural and assumptions, of sustained industrial growth urban areas will account for the bulk of new around 5 percent and elasticities more jobs for the foreseeable future. The wage typical of resource-rich countries in Sub- sector, where earnings are generally highest, Saharan Africa, agricultural employment remains of modest size at 17 percent in 2011, would continue to increase by 2 percent per of which nearly ten percentage points (a year, and by 2025, the wage sector would majority, therefore) are in the public sector. account for 20 percent of total employment. It is likely that resource constraints will limit This exercise shows that, while it will be the expansion of public sector employment, important to encourage a formal, urban, and the private wage sector can and should and modern sector that can create jobs with become the main source of growth. The higher earnings, Nigeria must also consider combination of a small base for wage how to increase productivity in agriculture employment and the high projected rate and nonfarm enterprises and help young of growth of Nigeria’s labor force implies people in particular establish themselves as that the share of wage employment in successful self-employed persons. total employment will not rise significantly. Estimates for Sub-Saharan Africa show Fostering jobs across sectors that if resource rich countries of the region Labor demand in the private wage sector register another decade of high economic growth (above 6 percent per year), by 2020 The story of the wage sector in Nigeria agriculture will still absorb almost half the often masks gaps between private wage labor force in these countries (Fox and others jobs and public sector employment. Noting 2013). the distinction is important, as one might otherwise focus erroneously on expanding the public sector as a solution to producing more wage jobs. 46 Job creation in the modern private wage sector could be held back by general Box 5.1. Do Nigeria’s Labor Laws Matter? constraints to firm growth, or by specific The purpose of labor regulations is to address labor supply problems that prevent labor market failures that result in inefficient or expanding firms from hiring labor. Examples inequitable outcomes, to avoid excessive worker of the latter include high labor costs for a turnover and underinvestment in training, to given level of worker productivity, either improve equality in wage bargaining power, to because wages are comparatively high, help insure workers against labor-related shocks, and to remove unsafe working conditions. There because strict labor regulations make may be a tradeoff, however, as regulations that it expensive or cumbersome to employ are too stringent could conceivably impose workers, or because the workforce lacks the high costs on firms that want to hire more necessary skills, meaning that workers are not workers or cause higher informality in working available or less productive in their jobs than conditions as firms avoid regulations. Overall, the impact of minimum wages and employment elsewhere. protection regulations on employment In Nigeria, businesses consider poor basic creation has been limited, for several reasons: conditions in the investment climate, rather employment protection regulations appear to be relatively flexible, other problems (like basic than labor supply problems, to be the most infrastructure) are much more important and are significant obstacle to business expansion. thus overshadowing these issues, and high levels According to the World Bank Enterprise of informality circumscribe the reach of labor Surveys for Nigeria (World Bank 2014a), the regulations. poor state of basic infrastructure (including Under Nigeria’s common law system, the major electricity and transportation) and the paucity sources of labor laws include Nigerian legislation, received English law, and Nigerian case law— of finance are major areas of concern for that is, decisions of Nigerian courts relevant to enterprises of all sizes, market orientation, labor law. Nigeria has also ratified all of the ILO’s and ownership type. In contrast, only 4 and fundamental labor standards, among others, 6 percent of firms, respectively, define labor and some have been incorporated into national regulations and workforce skills as major law. However, an International Confederation constraints to business. Labor regulations, of Free Trade Unions report indicates serious shortcomings in Nigeria’s application and in fact, appear to be comparatively flexible enforcement of the ILO’s eight core labor (Box 5.1). Compared to other countries in standards. Conflicts between trade unions and the Sub-Saharan Africa, Nigeria stands out as authorities have centered on gender inequality a case where infrastructure in particular is at work, the prevalence of child labor, and identified as a critical issue (Figure 5.5). An union rights such as the freedom of association, collective bargaining, and right to strike. extensive government survey of micro, small, and medium-sized enterprises similarly According to the Africa Competitiveness Report (World Economic Forum and others Figure 5.5: Percentage of Nigerian firms identifying 2013), Nigeria’s labor regulations are relatively electricity, finance, skill levels, and labor regulations as liberal compared to similar economies in major constraints, by firm characteristics Africa. While Nigeria is ranked 115th globally on competitiveness, it is ranked 44th on labor Some foreign ownership market flexibility. This largely reflects the lack Domestic Non-exporter of stringent regulations on hiring and firing Some exports practices. On employer-worker relations, as well as on the relationship between productivity and Nigeria Lagos Large (100+) pay, Nigeria scores lower than its size and level Medium (20-99) of income would suggest. In relation to this, the Small (5-19) minimum wage—at ₦18,000, or about US$110, per Total month, compared to the average manufacturing wage of US$134 per month—could be high. Sub-Saharan Afr 0 10 20 30 40 50 60 70 80 90 100 Source: World Economic Forum and others 2013; World Skills Labor regulations Finance Electricity Bank 2012. Source: World Bank 2014a. 47 singled out finance and infrastructure as a few firms (which compete for specialized key bottlenecks (SMEDAN 2010). One-third labor) in Africa’s small markets, high external of those surveyed firms also reported that costs that drive out many smaller firms, and not enough qualified workers were readily the impact of higher wages in nontradable available for their sector. sectors, including government. The significant expansion in public employment, strong A poor business climate dictates where concentration of educated persons in employment takes place, rather than limiting the government sector, and public wage employment per se. As shown, employment premium in Nigeria hints that educated creation happens almost “automatically” in persons in particular may be prepared to Nigeria and other African countries, as young be unemployed for some time and “queue” people come of age and have to make a for a well-paid job in the civil servant sector, living to survive. As a result, the effect of making it difficult for private companies to investment climate conditions on aggregate compete for qualified persons. employment is less strong in Sub-Saharan Africa than in other developing regions. In Is there a problem of information that fact, poor conditions tend to be associated prevents qualified workers and employers with high growth in very small firms. Instead from finding each other? There is still of holding back employment creation, limited understanding of how workers investment climate constraints allocate labor find their work and how firms find workers to less productive activities (Aterido and in Nigeria. In a setting where most work Hallward-Driemeier 2010). remains in the agriculture and household enterprise sector and the private formal Wages may be “too high” to be competitive. sector appears to struggle—mostly on Do Nigeria’s low income levels translate account of nonlabor issues like electricity, into low wages that can form the basis for transport, and governance—efforts to an (international) competitive advantage in, improve the search for jobs can only have a for example, the manufacturing industry, as limited reach. Qualitative work in Lagos and was the case in several East Asian countries Abuja, although limited to a small number of decades ago? In fact, wage levels may be firms and workers, suggests that firms face an obstacle to following the Asian countries’ significant challenges identifying qualified path. Although labor costs in Nigeria are low, workers, and skilled workers struggle to they are high relative to productivity, raising identify job openings (Box 5.2). Middlemen unit labor costs for production (Figure 5.6). exist to bridge this gap, but there may be The minimum wage may also be relatively a case for strengthening job matching in high compared to average wages, which larger cities where supply and demand for a could, in particular, deter the hiring of young given labor market is so much higher than in people into those sectors (Box 5.1). Work by Gelb, Meyer, and Ramachandran (2013) shows Figure 5.6: Labor costs are not competitive given low that African countries, including Nigeria, have productivity in most firms’ production high average price levels compared to other Labor Costs over value-added per worker developing regions; the ratio of price level 60% Labor Costs ans % of Value Added to GDP per capita is twice as high in Nigeria 50% as in Vietnam or Bangladesh, for example. 40% All else being equal, African firms also face 30% 20% higher labor costs than firms in other regions, 10% which is likely to reduce demand for labor, 0% and the differences are more significant China Kenya Thailand Brazil Malaysia Russia Nigeria South Africa Indonesia for firms with low capital intensity.15 The Africa-specific effect has many potential explanations, including the dominance of Source: World Bank 2014a. 15 Caution is warranted in interpreting these estimates because they may not include informal or part-time workers. Including these may in fact lower the real average wage bill. 48 Box 5.2: Leveraging ICT for job creation Information and communications technology has significant potential for accelerating positive economic and social development. (The link between development and ICT is the topic of the World Bank’s forthcoming World Development Report 2016.) Widespread access is enhancing this potential: the use of mobile phones in particular has expanded rapidly in Nigeria, including to lower-income families. Over 80 percent of Nigerians have access to a cellular phone, and nearly 50 percent of them have their own phone. In contrast, only 7 percent of Nigerians have access to the Internet. ICT can play a specific role in improving job outcomes by reaching more vulnerable youth or unregistered and hard-to-reach firms. Most ICT-based job functions relate to addressing information failures related to job search (where employers and suitably qualified workers cannot identify one another) or productivity (where self-employed workers lack the information they need to produce more efficiently, such as farmers who lack access to crop pricing). These services can be adapted to serve workers with low levels of literacy. In addition, there is a growing market exploiting technology-related labor opportunities, such as call centers or digital microwork, through which large-volume tasks are separated into small tasks that can be managed independently and require human judgment. Though not discussed here, there is also the potential to use ICT for skills development to increase employability. Job search assistance in one form or another has been shown to have moderate effects on employment outcomes, but only in a context where there are many job offers. In countries like Nigeria, where most people work for their family farm or in a nonfarm household enterprise, ICT services focusing on wage work are not likely to have significant aggregate effects. Nonetheless, they may serve a function in larger urban centers where the effectiveness of word-of-mouth transfer of information is limited. In-depth interviews with job seekers, employers, and recruiters in Lagos and Abuja point to a disconnect between jobs and workers, both skilled and unskilled. They also show, unsurprisingly, that job search methods differ: those with more education looking for a skilled job (professionals) use smart phones or computers to search for information, find job vacancy notices, and so on, while less skilled workers primarily use basic cellular phones (with text and audio functions, but no access to Internet or email) to obtain jobs through informal networks or word-of-mouth. Existing services in Nigeria are focused on job listings, mostly for prospective wage employees, both low-skilled (such as cleaners) and high-skilled. ICT for job creation ICT Service Description Examples Problem Tackled Matching Service that screens applicants Not available in Nigeria. Employees and employers employees to and employers to provide match; Elsewhere: Babajob, cannot find each other firms comparable to a headhunter for Recrutier effectively both formal and informal jobs Job lists, Lists all types of opportunities; Jobberman.com, Employees cannot locate full-time hire unscreened applicants can Naijajobs.com, Hotjobs. opportunities employees contact the employer com Job lists, self- Lists all types of opportunities; O desk, Graphic Self-employed persons employed unscreened applicants can Designer Jobs, Carpentry cannot find short projects contact clients Jobs Information for Provides firms with information Not available in Nigeria. Self-employed less self-employed to improve their business Elsewhere: Crop pricing productive due to lack of (in or out of data via SMS information relating to agriculture) their business Resume Service that helps applicants Not available in Nigeria. Job seekers do not have building, create a resume; may post the Elsewhere: Babajob, or do not know how to posting services resume for employers to find, Souktel prepare a resume that potentially including reference signals their competencies services to employers Globalizing jobs ICT is used to outsource jobs to Call centers, microwork Firms pay high labor costs with ICT developing countries (Samasource) in developed countries Source: Shah 2014; World Bank 2012; www.samasource.com. 49 smaller urban centers or in the countryside. in the agricultural and services sectors. This is particularly evident for the mining sector, Aside from providing opportunities for which creates wealth but accounts for very channelling jobs to workers, technology may little direct employment creation—less than also contribute directly to job creation. The half of one percent of total employment relatively broad reach of ICT, and mobile in 2011. In addition, there is a risk that a phones in particular, in Nigeria points to the dominant extractive resources sector can potentially significant role that technology have negative indirect effects on job creation can play in improving job outcomes more (Box 5.3). Nigeria would benefit from using its broadly. In addition, ICT provides a new considerable natural resources wealth for job- means of outsourcing services to developing enhancing investments in basic infrastructure, countries like Nigeria. for example, and to support diversification The role of natural resources in promoting of production and exports. Improved natural wage sector job creation needs to be resource management requires stronger considered. This report has shown that institutions. From this perspective, there is Nigeria combines middle-income status work left to do in Nigeria. The country ranks and Africa’s largest economic power with low in several international comparisons, high poverty levels, largely because the even by Africa’s generally lower performance main sectors of economic growth are standards.16 Strengthening economic and disconnected from the sectors that provide political governance in Nigeria could deliver employment, notably subsistence activities more benefits and jobs. Box 5.3: Natural resources and jobs—avoiding the Dutch Disease Extractive industries provide Nigeria with significant export revenues and foreign exchange earnings. Given the capital-intensive nature of the extractive sectors, their direct contribution to jobs is generally small and their links to the rest of the economy are weak. The indirect jobs that are created tend to be high value- added jobs in major cities and hubs, with little impact on poor people. Without a strong policy framework, moreover, oil wealth can have significant negative indirect effects on competitiveness and employment because these resources tend to be spent disproportionately on consumption and with an urban bias, rather than much-needed investment for the poor. The Dutch Disease, so named after the Netherlands’ experience with gas revenues in the 1950s, manifests if natural resource export revenues result in higher demand for nontradable goods and services, including through greater government spending. The resulting appreciation in the real exchange rate harms the competitiveness of international prices for tradable goods and services outside natural resources (such as manufacturing or agricultural goods), while investment tends to be driven away from the tradables sector and into natural resources or nontradables. The result is lower demand for tradable goods and subsequent job losses. Macroeconomic policies that stabilize the impact of inflows and increase national savings—accompanied by policies that encourage diversification, education, infrastructure, and innovation—can help reduce these effects. The World Development Report 2013 offers a description of how Chile’s “save management” of copper riches helped avoid the trap of insufficient diversification, poor governance, and poor employment outcomes that resource-rich countries so often face. Source: World Bank 2012. 16 Nigeria ranks 144th out of 177 countries in Transparency International’s 2013 Corruption Perception Index, 37th out of 52 African countries in the 2014 Ibrahim Index of African Governance, and 115th out of 144 countries in the Africa Competitiveness Report 2013 (Transparency International 2013; Mo Ibrahim Foundation 2014; World Economic Forum 50 and others 2013). Household enterprises level of basic, entrepreneurial, and technical skills is generally significantly lower in the Because of the private wage sector’s informal household enterprise sector than limitations in Nigeria, the household in the formal wage sector. Those working in enterprise sector is likely to continue to the firms as owners or contributing family absorb a significant share of those who members tend to have lower numeracy and leave the agriculture sector through more literacy and much less formal schooling. self-employment. Wage employment Vocational programs are rarely tailored to growth, at least in developed regions, is their specific needs and constraints (Adams, often driven by a handful of high-growth Johansson de Silva, and Razmara 2013). firms whose productivity and employment expands rapidly. Household enterprises are The income activities of household not such “gazelles,” however, and few of enterprises are broad and diverse, and little them can be expected to account for any is known about how to expand their income significant employment growth beyond the potential. A multitude of initiatives exist to size of a microenterprise. Employment and support self-employment in developing income diversification in the household (and developed) countries, yet lessons from enterprise sector tend instead to expand their implementation are difficult to identify on the extensive margin, with more due to the heterogeneity of programs. household enterprises created through self- These initiatives vary widely in targets and employment—that is, “nonwage” work (Filmer approach, lack rigorous evaluation methods, and Fox 2014). Given their role as a source and tend to focus on output indicators such of income diversification for the poorest, as the number of beneficiaries, rather than on in tandem with a transformation out of outcome indicators such as business growth agriculture, it will be important to help these or improvement in earnings (Box 5.4). firms increase their productivity and earnings. The agriculture sector These income activities are broad and diverse, however, and we know little about what works Agriculture will remain Nigeria’s largest to grow their income potential. employer in the near future, unless growth in the nonagricultural sector becomes highly Household enterprises face significant labor-intensive. Because the sector consists constraints in the business environment and mostly of smallholder farmers cultivating with regard to skills. Realizing the potential small land sizes of about one hectare, on of household enterprises is an important average, with low levels of productivity, there policy objective, both in helping people enter is significant scope for improving income the sector and to increase their viability and opportunities. Enhancing small farmers’ profitability once established. Yet the small productivity would serve as an engine for size and informal nature of these home- nonfarm activities if it were to increase jobs based businesses leave them under the radar and income, along with demand for goods of policy makers, compared to formal wage and services in rural areas and smaller urban employment in small and medium enterprises centers. Indeed a recent household survey- (SMEs) or larger firms. When acknowledged, based analysis (Oseni, McGee, and Dabalen they are often seen as an illegal sector. Like 2014) found that a 10 percent increase formal firms of many sizes, they suffer from in agricultural productivity decreases the lack of access to finance, poor infrastructure, likelihood of being poor by 2.5 to 3 percent. and limited access to markets, and their small It requires overcoming the main constraints and irregular nature makes them vulnerable that farmers face in Nigeria, including low to harassment. Urban policies rarely take recourse to inputs, poor quality of inputs, market space for household enterprises into low access to credit and markets, and weak account, and in some areas they are explicitly technical knowledge and practices. Income discouraged (Watson 2011). In addition, the from wages and other nonfarm activities has 51 Box 5.4: What is known about the effectiveness of support for self-employment in developing countries? The self-employed are a mixed group. Most are unpaid family or own-account workers in household enterprises with subsistence activities, although they include those heading SMEs. Existing program evaluations suggest that many programs focus broadly on SMEs and microenterprises, but may for those reasons fail to respond to the needs of subsistence entrepreneurs. Yet the aspirations, needs, and constraints of the latter group may differ greatly from those of the typical SME owner (Cho, Robalino, and Romero 2014) in terms of skills development (including entrepreneurial intent), access to finance and social capital, access to markets, and navigation around cultural and social norms. Even when focusing on programs for microenterprises, guidance for policy makers is limited, as most interventions do not use rigorous methods that can determine program impact or, possibly, because the time horizon for implementation and evaluation is too short to allow businesses to change. Existing metaevaluations show that program impact is mixed. For example, Cho, Robalino, and Romero (2014) find that less than half of the 100 or so microenterprise programs they review have positive impacts, and that even positive impacts are generally small. Integrated programs that involve training, access to finance, mentoring, and so on, appear to work better than stand-alone finance programs. Similar reviews find that microcredit schemes, while helpful in starting businesses, do little to expand opportunities for existing enterprises and training interventions, and while they are helpful in improving business practices, they do not tend to improve sales (Cho and Honorati 2013; Grimm and Paffhausen 2014). A literature survey of business training programs shows much less impact on firm survival than on establishment of firms, indicates that training does improve business practices but only marginally, and shows that the impact on sales and turnover is generally insignificant (McKenzie and Woodruff 2012). Overall, results appear to be less favorable for women, most likely reflecting the additional constraints they face in terms of family responsibilities and norms regarding work. The argument for helping household enterprises increase their profits and, where possible, engage in more dynamic economic sectors is solid. However, because of the limited evidence base and the fact that most program evaluations are small pilots, careful consideration is needed to identify the appropriate constraints— especially for household enterprises and microenterprises, and for the individuals who run them—and test appropriately different approaches. a larger effect on poverty reduction than to more than 200 percent compared to income from agriculture. Therefore, while Asian countries; and (iv) there are untapped improvements in agricultural productivity are resources in terms of uncultivated land and critical, providing off-farm opportunities for water resources for irrigation systems. The jobs and self-employment would be equally experiences of other developing countries or even more beneficial for rural households. demonstrate the significant role that agro- based industries could play in economic Promoting private sector-led agribusiness development and rural incomes. More value chains that integrate small farmers, generally, an increasing body of evidence and focusing on the country’s fast-growing confirms the direct correlation between domestic markets for processed products, agribusiness development on the one hand may provide significant income opportunities and economic growth and sustainability on to rural areas. Several facts point to an the other (FAO 2010; Yumkella and others; untapped potential for domestic agriculture World Bank 2013) through upstream and and agribusinesses in Nigeria: (i) the country downstream integration with other sectors of has the fastest-growing food market in the economy. Africa but depends on imports; (ii) as the world’s largest producer of cassava, yam, Reforms are needed to overcome major and sorghum, Nigeria has a large staple constraints to private sector investment in production base, but very little is processed agriculture. These include, inter alia, poor locally; (iii) there are important yield gaps infrastructure (such as roads, energy, storage, for major crops, ranging from 69 percent and water supply), inadequate financing, 52 unreliable supply of raw materials, and Improvements are needed in the quality an unpredictable policy and regulatory and accessibility of basic education to environment. With the Agricultural accommodate the growing numbers of Transformation Agenda (2011), the children and young people. Investments government is now fostering business-friendly in early childhood development, including policies in the sector, including: (i) broadening adequate nutrition and activities to develop the reach of the fertilizer subsidy program cognitive abilities, are cost-effective for smallholder farmers and making it more compared to interventions later in life. efficient and business-oriented under the Building an educational foundation through Growth Enhancement Scheme; (ii) promoting basic literacy and numeracy, together with investment in productivity-enhancing workplace skills such as discipline, team technologies and improving the marketing of building, and familiarity with learning agricultural products; (iii) reducing the cost situations, has been shown to be important of doing business in agricultural production for successful work as a self-employed and processing to attract private sector entrepreneur and is strongly associated investment in agribusiness under the Staple with access to apprenticeships (Adams, Crop Processing Zones (SCPZs) program; Johansson de Silva, and Razmara 2013). and (iv) facilitating access to financing. In Given the coming expansion in Nigeria’s child response, a number of global and domestic population, the number of school places agribusiness companies have expressed must expand rapidly. In particular, significant interest in investing in Nigeria and have effort and investment will be needed to started to develop initiatives under the increase access for marginalized groups, SCPZ program. In addition to streamlining including children of poorer households and ongoing reforms to accelerate the move, the girls, and to ensure that access translates government would need to develop adequate into real and relevant learning for all. At the arrangements with the private sector in line same time, it will be essential to address with international guidelines on responsible constraints on the demand side by raising the investments in agriculture to ensure the value of education for parents and children, inclusion of small farmers and attention to and lowering the cost of access for more social and environmental sustainability, while vulnerable groups. reducing the risk of land grabbing (FAO 2012, Beyond basic education, improving the 2014). relevance of education will be essential Building skills for the labor to increase employability and foster more market productive enterprises. There is a reported lack of skilled individuals in technical While enterprise surveys show that businesses vocations in Nigeria. Formal, public vocational do not consider skills deficits to be a major education and training centered on preparing constraint (World Bank 2014a), they are likely students for a specific occupation is limited, to become an issue as Nigeria develops its both at secondary and post-secondary economy. The shift toward jobs that involve levels. For the few students who attend these more knowledge-based tasks will require colleges, training remains largely supply- new skill sets. Yet adult workers’ skills are the driven. Approaches to content and teaching outcome of an education and skills system are dated, and equipment and facilities are that encompasses many years of cumulative poor (World Bank 2014d). Addressing these learning. In some areas of the country, severe issues will require stronger collaboration with gaps in access to education—particularly for the private sector to ensure the relevance girls—will drive inequality in access to job of the curriculum, increase exposure to the opportunities for the next generation. As a world of work, and provide students with result, investment is needed now to avoid connections to support their search for work significant bottlenecks later. after graduation. The mainstream education 53 system is complemented by nonformal Reducing income volatility over training and by apprenticeships, both of the short term which are likely to far exceed formal training Safety nets are needed to prevent people methods in volume. Although these are more who do not have a job from falling into accessible forms of training, not enough is (deeper) poverty and to protect economic known about their quality and relevance. development over the longer term. Economic Apprenticeships are the most common crisis and income vulnerability can have mode of training for the self-employed, painful effects on workers in sectors affected especially in the informal sector. Traditional by shocks, but also risk weeding out apprenticeships have several strengths, innovative new firms and eroding human including their accessibility for young capital (Paci, Revenga, and Rijkers 2009). people with limited prior education and The low connectivity between Nigeria’s low ability to pay, self-financing, flexibility, employment structure and global markets and a combination of work and on-the- means that vulnerability is not transmitted job learning. On the other hand, their to Nigerian households primarily through efficiency depends on the knowledge of shocks in international prices or demand. master craftspersons who may lack updated Nonetheless, poorer households need technical or pedagogical skills, and they to manage both low and uncertain labor provide no standardized certification that can income. As shown in Section 4, those in low- be acknowledged in the labor market. Given income employment, especially in agriculture, their greater accessibility compared to formal become unemployed or inactive in the vocational training, it is important to consider season when there is no work to be done ways to improve the quality of training and on the farm. Furthermore, given the reliance the value of apprenticeships in building on low-technology, rainfed farming, half of market-relevant skills. Nigeria’s working population depends on weather conditions for their daily bread. Flexible forms of training are needed to reach the self-employed. Most education and Nigeria has various social safety net programs training options, including apprenticeships, at the state level and is currently developing a center on the pre-employment period. national program to support those in extreme However, given the early entry into self- poverty. Social safety net programs have employment by many of those who operate been implemented by the government and small household enterprises, it is important development partners at all levels, and for to consider policies to help those who are various stages of the life cycle, but most are already working. Such policies need to take small and fragmented. However, the absence into account the constraints and needs of a coherent framework and institutional of many smaller firms, including offering home for social safety nets has resulted in a opportunities to pay for training through proliferation of social assistance programs means other than cash or by combining across the country, most of which are modest production and work, designing modular in scale and target widely varied groups of courses that permit workers to combine beneficiaries. The government is working to business activities with skills upgrading, and design a National Social Safety Net Program addressing the need for multi-skilling (Adams, that would provide income support to poor Johansson de Silva, and Razmara 2013). people, including those whose labor income is not sufficient to keep them out of poverty. 54 Policy makers often turn to public works broader safety net system. Nigeria has several programs to provide poor people with short- such schemes underway, some of which are term employment and income support. Public more comprehensive programs that include works programs generally provide temporary building employability or fostering firm employment at low wages to unskilled creation over the longer term. A priority in manual workers on labor-intensive projects Nigeria, as in other countries, is to measure such as road construction and maintenance, and rigorously evaluate these experiences irrigation infrastructure, reforestation, and to understand how public works programs soil conservation. When the wage rate is can be designed to improve employment set at an appropriate level, these programs outcomes (Box 5.5). can be an effective tool for reaching poor people and an important element of a Box 5.5: What role can public works programs play in jobs and employability in Nigeria? While Nigeria does not have a national public works program on the scale of Ethiopia or India, for example, it has been implementing federal and state-level initiatives since the mid-1980s. One early venture at the federal level was the Job Creation Program of the National Directorate of Employment (NDE), which was set up in 1987 to deliver on the government’s objective of generating employment opportunities for the growing workforce. Since its launch, the NDE has implemented a variety of programs, including public works, training, and apprenticeships. In 2011 it estimated that the full set of NDE programs have provided employment to over 3 million unemployed workers. Implementation challenges have included limited funds, inadequate training facilities, and low private sector involvement. The Subsidy and Reinvestment and Empowerment Program began in 2012 as a response to the partial removal of oil subsidies. It includes a set of labor-intensive programs across federal ministries, departments, and agencies, including maternal and child health care, vocational training, mass transit, and community services. Some of these programs target specific groups, such as women and unemployed young people. The National Job Creation Scheme, announced by the Presidency in 2010 with seed funding of ₦50 billion, is meant to include labor-intensive public works in sectors related to the MDGs. The program’s status is unclear, however. Beyond the federal level, states such as Lagos, Edo, Jigawa, Bayelsa, and Ekiti have their own labor-intensive works programs. Lagos has been the most active in reporting on its programs. The Rice for Jobs Scheme, for example, reintroduced rice farming with an emphasis on implementing modern irrigation systems. The Agriculture Youth Empowerment Scheme, also in Lagos, provides training to involve young people in modern agricultural practices. This program exemplifies the global trend toward “Public Works Plus” programs, which go beyond temporary employment to include training and/or savings to graduate participants out of poverty and connect them with longer-term formal sector employment or self-employment. Measurement and evaluation of these experiences will be essential to understand how public works programs can be designed to have the most beneficial effect on employment outcomes. The impact evaluation planned under the Nigeria Youth Employment and Social Support Operation offers a promising learning opportunity. The evaluation will assess how complementary life skills training can assist beneficiaries in graduating from public works programs to self-reliance. Source: Utah 2014; Subbarao and others 2012. 55 Improving data for policy making Continued improvements in the quality Efforts to identify appropriate employment and focus of the household survey series policies must be based on reliable data will be important. Looking forward, a labor and rigorous analysis. This report has been force survey series would be ideal for labor conducted without the use of a formal labor analysis. Given resource limitations in the force survey or firm surveys, relying instead national household survey program, however, on national household survey data. This investing in the household survey series and experience has highlighted three broad areas improving its quality is of higher priority that need attention to improve labor data than conducting another one-off labor force in Nigeria. First, general data quality issues survey. On the firm side, enterprise surveys precluded the use of some survey rounds. are a crucial source of details around firm With the exception of GHS-Panel data, the constraints as well as general employment authors spent considerable time cleaning statistics, depending on sample coverage. data to produce consistent and credible There is scope for synchronizing the statistics statistics. Second, poor documentation generated from these various surveys—that and archiving eliminated some data from is, for collaborating on cross-sectoral total consideration. In some cases, only partial labor estimates between household and firm data could be located. In other cases, data surveys, which has not yet been done. were more complete but documentation was insufficient to make use of them, especially to produce national statistics using proper sample weights. Later survey rounds were much improved, especially in the case of the GHS-Panel, which had both excellent documentation and archived data files. Third, the labor modules of survey questionnaires were not always standardized. Although the GHS annual survey maintained consistent questions, the structure of questions varied across other data sources. 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