Abstract

Despite great efforts to promote decent employment for all (SDG 8), many poor in sub-Saharan African (SSA) countries rely on self-employment for survival. Given the precarious nature of such employment, policy interventions, including increased government spending aimed at reducing such employment, are necessary for achieving SDG 8. Nonetheless, empirical evidence in this regard is lacking. We fill this research gap by examining how government spending affects self-employment in five different quantiles – 10^th, 25^th, 50^th, 75^th and 90^th – using Simultaneous Quantile Regression (SQR) analysis across 41 SSA countries from 1991 to 2021. Two key findings emerge from the study. First, the effect of government spending on self-employment are statistically significant across all quantiles. As we move from lower to higher quantiles, the effect diminishes, suggesting that government spending has a greater effect on self-employment in countries with low levels of self-employment. Second, the effects are gender-specific, with the effects being more pronounced on female self-employment in countries with low levels of self-employment. The study concludes with policy implications.

Primary Track