An analysis of employment intensity of sectoral output growth in Botswana

Despite an impressive macroeconomic growth record in Botswana over the past four decades, high unemployment and poverty incidences remain persistent and an intractable challenge of macroeconomic management in the country. The study explores the employment intensity of sectoral output growth in Botswana with a view to identifying key sectors of the Botswana economy that are employment intensive. To achieve this objective, the study used both simple elasticities and econometric procedures to provide empirical evidence concerning the extent to which economic growth that has occurred in Botswana is employment intensive and in which sectors. The findings confirmed the low labour absorptive capacity of the Botswana economy at the aggregate and at sectoral decompositions, suggesting the notion that growth performance in the country is, after all, 'jobless growth'. With respect to policy, the study recommends a successful mineral-led economy that is able to diversify into sectors and activities that are by nature relatively more labour-intensive.