Employment and Micro and Small Enterprises
von Sarah Wiegel geb. Linde
Datum der mündl. Prüfung:2019-11-25
Erschienen:2020-01-16
Betreuer:Prof. Dr. Jann Lay
Gutachter:Prof. Dr. Jann Lay
Gutachter:Prof. Dr. Stephan Klasen
Gutachter:Prof. Dr. Renate Hartwig
Dateien
Name:Dissertation_Sarah_Wiegel.pdf
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Format:PDF
Zusammenfassung
Englisch
This cumulative dissertation analyses the performance of micro and small enterprises (MSEs) in developing countries and their role in the creation of productive employment and decent work. It consists of four independent research papers. The introductory Chapter 1 highlights the importance of (informal) MSEs for employment and reviews the different constraints that these firms face. Chapter 2 revisits the employment-related target postulated in the Millennium Development Goals (MDGs) and its corresponding indicators. Measurement problems, the inappropriate use of aggregate statistics, ambiguous interpretability, and assumptions, which often do not hold true in the context of developing countries, are identified as major shortcomings of the MDG indicators. Based on these critical reflections, we propose four indicators under the employment target “to achieve full and productive employment and decent work for all”: (i) the growth of labour value added per worker, (ii) the working poverty rate, (iii) the share of workers receiving less than (a) an absolute and (b) a relative minimum labour income. The empirical application of the indicators using national household survey data from Uganda and Peru reveals a lack of decent pay and the associated problem of unequal labour incomes in these countries. Chapter 3 provides evidence for the heterogeneity of the informal sector by reviewing the literature on minority-owned businesses in developing countries. Self-selection, settlement policies and colonial history have promoted the formation of immigrant minority communities. Within these communities, improved information flows reduce problems of asymmetric information and contract enforcement. This gives members access to resources from which native businesses may be barred because of market imperfections. Statistical discrimination and network effects reinforce the dominant market position of these communities over time. Chapter 4 uses panel data of about 500 urban MSEs in Sri Lanka to investigate differences in capital stock and production technologies between firms with unrestricted access to the formal credit market, firms that are formally credit constrained but have received loans from family and friends, and firms that have neither access to formal nor to informal credit. Access to family finance is significantly correlated with higher capital stocks, capital-labour ratios and capital-output ratios for the sample of formally credit-constrained firms only. We find that credit-constrained firms with access to family finance are able to adjust their capital stock and production technologies over time to those of firms with access to formal finance. This implies that loans from family and friends can act, to some extent, as a substitute for formal credit. In Chapter 5, we turn our attention to the worker and examine whether higher firm profits translate into higher wages for employees of MSEs in urban Uganda. In contrast with competitive labour market theories, firm-time fixed effects account for a major part of the variation in workers’ wages. A 1 per cent increase in hourly profits ceteris paribus increases wages by 0.218 per cent. We explore three different explanations for the observed profit-wage relationship: rent sharing, risk sharing and efficiency wage models. We find no evidence for rent sharing using the educational difference between employer and worker as a measure for bargaining power. The profit-wage relationship seems to be stronger for firms experiencing high profit risk – indicating risk sharing - albeit the effect is very small. Finally, our results show that larger firms pay higher wages - consistent with efficiency wage models – but this effect does not seem to work through profits.
Keywords: Micro and Small Enterprises (MSEs); employment; development economics