Skill Intensity, Workforce Education and Productivity of SMEs in Ghana

This study estimates the productivity among Small and Medium firms (SMEs) in the manufacturing sector of Ghana, using the TFP approach and examines the effects of skill intensity and workforce education on firm productivity using the first and second rounds of the World Bank's Enterprise Survey for Ghana. The study uses share of skilled labour in employment and average years of education as measures for skill intensity and workforce education respectively. It employs panel estimation techniques involving Ordinary Least Squares (OLS), Random Effect (RE) and Fixed Effect (FE) to examine the effects of skill intensity and workforce education on firm productivity and interprets the random effect (RE), subject to favourable diagnostic tests. After analysing an unbalanced panel of 194 and 72 small and medium sized firms respectively, the econometric analysis shows that skill intensity and workforce education help to improve the productivity (TFPs) of SMEs significantly. It is thus recommended that employers and important actors of the labour market should put premium on critical skills and education of the workforce since they are key determinants of productivity, hence wages.

Autorentext
Matthew Quaidoo studied MBA in General Management and M.Phil in Economics at the University of Cape Coast, Ghana. Given his background, he has nurtured research interests in Economics and general Management issues. He has worked in varied research projects, and co-authored several articles with focus on SMEs.