Safia Khan, guest blogger, is a researcher at Research ICT Africa
In much of Africa there has been a rapid uptake of mobile phones. Their ability to contribute to increased welfare outcomes such increased gender equality and the alleviation of extreme poverty has been widely discussed. But, analysis of the impacts of such information and communication technology (ICT) on the labor market outcomes of those in developing countries, is almost non-existent.
Instead, the impact of ICTs on job creation has mostly been looked at from a sectoral level, mainly via direct increases in technical job creation within the ICT sector. Yet, as the reach of wireless technologies expands farther through mobile phone penetration – now in ever more remote areas of Africa – and increased use of the internet, there has not been much analysis of the ability of ICTs to enable improved labor market outcomes: either directly through improved job search, or indirectly through the mechanisms of decreased transaction costs and increased efficiencies. This gap in the literature seems rather peculiar given the large proportion of the development agenda that focuses on ICT. Then again, it may be attributable to a lack of reliable and representative ICT demand side data in Sub-Saharan Africa.
The charts below peg mobile ownership rates next to the employment rates of twelve African countries in 2012. The graphs clearly highlight that there is no simple visual relationship between the rate of employment and the mobile ownership rate. Take the case of South Africa for instance, where only 47% of the labor force is employed, yet 84% of the population owns a mobile phone. Or in Ethiopia, where there is a 61% employment rate, yet a mobile ownership rate of only 18%.
Turning to the impact of ICTs on job search, individuals’ perceptions about whether having a mobile phone helps you find work are intriguing. In the figure below, it is most obvious that there was a decrease in the proportion of those who believed their phone helped them find work between 2008 and 2012. This could be because as mobile phone penetration increases, the novelty of ownership may be perceived to wear off. But even in 2012, no more than 52% (in Rwanda) and no less than 29% (in Nigeria) of those with a phone believed it helped them find work – showing at least some kind of belief that mobile phones lead to some form of an employment outcome.
Modelling this hypothesis (see table below) shows that in eight out of the eleven countries analysed, a mobile phone increases the probability of finding a job, compared to those who do not own a mobile phone. What is also striking is that this result changes with geolocation and gender. Mobile phones make men and those in urban areas more likely to find employment than their female or rural counterparts.
There is one drawback to this finding though, and that is that the labor market equips those who are employed with the economic ability to acquire costly assets like mobile phones. The data shows, however, that there is a large proportion of unemployed people who have phones, and employed people who choose not to have phones. This adds credibility to the results found above: mobile phones seem to improve the labor market outcomes of those who own them, compared to those who do not.
These results present some evidence for the case that ICTs (in this case mobile phone ownership) have an effect on improving employment outcomes in many countries in Sub-Saharan Africa. Whether this is through a direct effect of job search, or through a more indirect means such as decreased transaction costs and increased efficiencies, the true effect can only be determined by a controlled study.