TY - JOUR

T1 - Employment Creation through Social Networks in Emerging Urban Centres in Rural Tanzania

AU - Nyaki, S.A.

AU - Kilima, F.T.

AU - Larsen, M.N.

PY - 2022

Y1 - 2022

N2 - Development of non-farm businesses in Emerging Urban Centres (EUCs) is pivotal in increasing employment opportunities to resource curtailed rural population. This paper aims to examine how businesses use social networks to recruit labour and how the size of their social network influences employment creation in EUCs. A survey of 459 and 296 randomly selected businesses in Ilula and Madizini EUCs respectively was done in 2017 and was supported by information from 38 key informants. Descriptive analysis revealed that strong and weak social network ties were instrumental in recruiting labour. Crop value chains (tomato in Ilula and paddy in Madizini) generated a ripple of employment opportunities in businesses like wholesale, trading, manufacturing, and construction through multiplier effect. Left censored Tobit regression availed that the likelihood of creating more employment opportunities in Madizini and Ilula was improved by increasing the size of business network and forging linkages with well-networked businesses. Thus, just as social networks are revealed to play a major role in recruiting labour and employment opportunities around EUCs, they are also important in supporting future employment creation prospects. This is important in rural areas where informal sector is dominant. Employment creation efforts should therefore be capitalized along major crop value chains which provide forward and backward linkages to wholesale, crop trading, manufacturing, and construction business sub-sectors

AB - Development of non-farm businesses in Emerging Urban Centres (EUCs) is pivotal in increasing employment opportunities to resource curtailed rural population. This paper aims to examine how businesses use social networks to recruit labour and how the size of their social network influences employment creation in EUCs. A survey of 459 and 296 randomly selected businesses in Ilula and Madizini EUCs respectively was done in 2017 and was supported by information from 38 key informants. Descriptive analysis revealed that strong and weak social network ties were instrumental in recruiting labour. Crop value chains (tomato in Ilula and paddy in Madizini) generated a ripple of employment opportunities in businesses like wholesale, trading, manufacturing, and construction through multiplier effect. Left censored Tobit regression availed that the likelihood of creating more employment opportunities in Madizini and Ilula was improved by increasing the size of business network and forging linkages with well-networked businesses. Thus, just as social networks are revealed to play a major role in recruiting labour and employment opportunities around EUCs, they are also important in supporting future employment creation prospects. This is important in rural areas where informal sector is dominant. Employment creation efforts should therefore be capitalized along major crop value chains which provide forward and backward linkages to wholesale, crop trading, manufacturing, and construction business sub-sectors

M3 - Journal article

VL - 12

SP - 56

EP - 90

JO - Eastern and Southern Africa Journal of Agricultural Economics and Development

JF - Eastern and Southern Africa Journal of Agricultural Economics and Development

SN - 0856-6070

IS - 1

ER -