Spatial and Sectoral Heterogeneity of Occupational Choice in Cameroon

Bougna, Theophile ; Nguimkeu, Pierre

World Bank, Washington, DC

关键词: ACCESS TO CREDIT;    ACCESS TO FINANCE;    INFORMALITY;    PRODUCTIVITY;    LABOR MARKET;   

DOI  :  10.1596/1813-9450-8515
RP-ID  :  WPS8515

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper investigates the relationshipbetween location, agglomeration, access to credit,informality, and productivity across cities and industriesin Cameroon. Emphasizing the link between micro-foundationsand the data, the paper develops and estimates a structuralmodel of occupational choice in which heterogeneous agentschoose between formal entrepreneurship, informalentrepreneurship, and non-entrepreneurial work. Theirdecision-making process is driven by institutionalconstraints such as entry costs, tax enforcement, and accessto credit. The model predicts that agglomeration has anon-monotonic effect on formalization, and entrepreneurialprofits increase with agglomeration effects. Estimating themodel by the generalized method of moments, the paper findsthat the returns to capital and labor are not uniform acrosssectors and cities. Manufacturing industries are highlyconstrained in capital and the elasticity of capital ishigher in Yaoundé and Douala, whereas labor elasticity ishigher in Kribi. Counterfactual simulations show that anincrease in roads provision can have a substantial impact interms of output, formalization, and productivity. Areduction in the current interest rate has a large andsignificant impact on formalization and no significanteffect on business creation. Likewise, while the current taxrate is suboptimal for most cities, a tax reduction policywould have a much greater impact on formalization than onbusiness creation. These effects differ substantially acrosscities and sectors, suggesting that those policy instrumentscould be implemented accordingly to support formalizationand business creation.