Precarious employment and household welfare in Ghana

Abstract

Rapid changes in global labour markets are compromising traditional employment structures, leading to increased precarious employment, particularly in developing countries, such as Ghana. Characterized by job instability, inadequate income, and a lack of essential protections, precarious employment poses significant challenges to both individual and household well-being. Although these conditions lead to adverse social and economic outcomes, evidence of precarious employment and its implications remain limited. This thesis investigates three objectives relating to precarious employment: (1) estimate the inequality of opportunity in precarious employment in Ghana; (2) examine the causal effect of precarious employment on household food insecurity; and (3) assess the impact of precarious employment on household vulnerability to multidimensional poverty. The main data were sourced from Ghana‘s Annual Household Income and Expenditure Panel Survey (AHIES) augmented with administrative data at the district level. Precarious employment was measured as a multidimensional index of income inadequacy, employment insecurity, lack of rights, and unsafe work environments. Food insecurity and vulnerability to multidimensional poverty were assessed using the Food Insecurity Experience Scale and the Multidimensional Poverty Index, respectively. Econometric techniques, including the inequality of opportunity approach, two-stage least squares, dominance analysis, and control function approach, were employed. The findings indicate that over 70% of the sample was engaged in precarious employment, which suggests a concerning level of inequality in access to stable and secure job opportunities. The data reveal that this inequality of employment opportunities is particularly pronounced among the youngest and oldest cohorts, as well as in rural and low-development regions. The key findings indicate that precarious employment is a primary driver of food insecurity in the study population. Among the various dimensions of precarious employment, employment insecurity was the primary predictor of food insecurity, which was exacerbated among female and rural workers, although social protection programs helped mitigate these effects. Precarious employment increases vulnerability to poverty, with female-headed, rural, and low-income households being most affected. This study recommends that the Ministry of Employment and Labour Relations enforce employment standards, enhance job security, and promote training programs. Health and social protection programs, including preventive healthcare and food assistance, should be prioritised to mitigate health shocks and alleviate food insecurity. To build human capital, the Ministry of Education must expand access to quality education and vocational training, particularly in rural areas. The Ministry of Gender, Children, and Social Protection should implement gender-sensitive policies and financial literacy programs to support asset accumulation in female-headed households. Collectively, these strategies aim to reduce inequality and support sustainable growth.