Employment impact assessments in Africa: Application and suitability of local multiplier analysis

This note attempts to assess the application and suitability of local multiplier (LM) analysis to estimate the long-term effect of changes in manufacturing employment in other sectors. Estimating these effects are important as productive employment creation is linked to the development of the manufacturing sector, which is equated with international trade. The note provides a critical review and analysis on the applicability of the LM method, which estimates the additional or indirect jobs occurring in the tradeable and non-tradeable sectors owing to a new direct job created in the tradable sector. It covers the theory behind LM, suitability of the methodology and existing research in the context of sub-Saharan Africa.