A team of IFPRI researchers has been exploring whether Malawi’s labor force and landscape has been shifting out of its traditional subsistence agriculture sector and into the industry and services sectors in recent years, as well as the role that youth might play in these changes. The study assesses which factors, if any, impact individuals’ –and in particular youth’s—employment choices in Malawi. It asks (1) if there has been a shift of labor out of agriculture and into other sectors, and (2) if youth in Malawi are entering the labor force differently from past generations?
Overview
Analyzing data from three nationally representative household surveys for Malawi conducted between 2004 and 2016, the researchers found very little evidence in the data of a structural transformation in Malawi’s economy or of youth being in the vanguard of any shifts in the pattern of employment. Most Malawians spend all of their working years in the agriculture sector. In fact, the share of employment in the agriculture sector rose slightly between 2004 and 2016, despite Malawi’s increasing educational attainment levels and evidence that higher educational attainment is strongly associated with non-farm employment. It is only later in their working life cycle that the majority of Malawian workers without higher education, particularly males, are likely to be in a position to obtain employment outside of agriculture alone, particularly in the services sector.
Before looking more closely at the study results, it is important to understand the context in which Malawian youth live.
The demographic and socio-economic landscape
Malawi has one of the fastest growing populations in the world, which is projected to be 43.1 million by 2050, up from 18.9 million in 2018. (See Figure 1, below, based on the United Nations’ Statistics Division’s median growth scenario). Malawi also has one of the youngest age structures in the world, with 45 percent of its population under 15 years of age, which results in increasing pressure to use all available land for agriculture—among other side effects.
Figure 1: Population Projections in Malawi
Furthermore, Malawi’s youth—especially females—are becoming more educated, especially following the start of the Malawi’s free primary education program in 1994. Years of education completed for youth between 15 to 24 years of age increased from 5.0 years in 1998 to 7.3 years in 2016. These factors indicate that more and more Malawians, especially young and educated ones, will be seeking sustainable livelihoods and brighter futures for themselves and their families in coming years. How, if at all, can the agricultural and rural economy support this growing need?
What role does agriculture play in the structure of future employment in Malawi?
According to the World Bank, Malawi is among the 15 most agriculture-dependent countries in the world. In 2013, 87 percent of those of working age who were employed were working in agriculture. However, factors pushing workers out of agriculture are intensifying. For example, median land area cultivated per agricultural household declined from 0.57 hectares to 0.45 hectares between 2004 and 2016. With farm size declining, the sustainability of agriculture-based livelihoods also declines. Research shows us that these push factors will continue to intensify with population growth.
At the same time, the factors that pull people into non-farm sectors are strengthening. These include growth, if modest and variable/volatile, in the Malawian economy; expanding employment in the services sector; increased educational attainment permitting educated individuals to access jobs outside of agriculture; and regional labor migration, especially by young males to South Africa.
Main findings
Using Malawi’s Integrated Household Survey (IHS) data series, IHS-2 (2004), IHS-3 (2010), and IHS-4 (2016), the IFPRI study examined how Malawi’s social, demographic, and economic context affected the employment choices of Malawians, particularly for individuals of working age (15 to 64 years). Data were disaggregated by age, according to the UN definition of youth – younger youth (15 to 24 years), older youth (25 to 34 years), and non-youth (35 to 64 years); by rural or urban residency; and by sex. If an individual was employed, then the sector of employment– agriculture, industry, or services – was examined. The study found that 88 percent of Malawi’s employed population works in agriculture, and that over 60 percent of older youth and non-youth work in agriculture. If an individual was not economically active, then whether the individual was a student was considered. For example, 45 percent of younger youth are students, while 33 percent of younger youth work in agriculture. (See Figure 2.)
Figure 2: Size of employment categories by age cohort, disaggregated by rural and urban and by male and female, percentage share of population, 2016-17
Source: Analysis by authors of the Fourth Integrated Household Panel Survey (IHS-4). *Click on Figure 2 for full view.
Overall, there was very little strong evidence that structural change in employment is gaining momentum in Malawi, or that youth are at the forefront of such change. Agriculture remains, by far, the main entry-point into work and continues to dominate overall employment.
Working in non-farm sectors still is rare and more commonly occurs later in life, after workers have built the financial capital, experience, and social networks needed to succeed outside of agriculture. In particular, there was a decline in workers employed in the industry sectors between 2004 and 2016, but some growth in the share of those employed in the services sector over the same time period, especially among non-youth.
In terms of overall job growth, the largest jump was seen in the share of working age individuals who are students, particularly those between 15 to 24 years of age, increasing from 35 percent in 2004 to 45 percent in 2016.
There is a reduced share of younger youth employed in this period, but if they are employed, they tend to work on-farm.
In sum, there is little evidence of change in how Malawi’s youth enter the work force. The share of Malawi’s working age population grew by 2.7 percent from 2004 to 2016, but this was lower than the overall population growth rate of just over 3.0 percent. More older youth and non-youth are employed in Malawi’s services sector, though there is an overall decline in the industry sector. Evidence does not suggest any strong indication of structural transformation underway yet in Malawi. The employment structure remains dominated by agriculture, as it has been for generations.
Some suggestions to guide action and investment
Malawi is experiencing very rapid population growth, so there will be more youth entering the job market than ever before. Scarce land and other natural resources and current farm productivity levels cannot sustain their growing needs. This study suggests that while further investment in improving the quality and quantity of education offer good returns, there is a need for further diversification of the Malawian economy. Even Malawi’s most education youth struggle to find the good jobs, both outside and inside agriculture, which will enable the economy to grow and diversify. While foreign direct investment is often seen as the principal channel for providing the technology needed to create such jobs, public investment as well as private sector incentives are also critical in promoting employment opportunities for Malawi’s youth. Attracting more investment will also require better transport infrastructure, more reliable energy supplies, and significant urban development.
Given that agriculture will likely remain at the core of Malawi’s economy for some time to come, continued investment in agricultural productivity is essential. A more vibrant agricultural sector would directly feed into growth in the manufacturing and services sectors, especially if the sectors are well functioning and well linked. Increased value-addition involving the processing of agricultural products, together with light mechanization that will reduce the drudgery of farming, and an expansion of the crops grown and products manufactured, are all likely to be central components in the structural transformation of Malawi’s agro-based economy.
RESOURCES
- Change and Rigidity in Employment Patterns in Malawi, 2004 to 2016 , paper presented at the 30th International Conference of Agricultural Economists in July 2018
- Original blog on Malawi’s changing employment landscape, July 2017
- Malawi Labour Force survey report, NSO, 2013.
- World Bank book on youth and employment, 2014.
- IDRC scoping study report on youth and employment, 2015.
