What Determines Productivity in Senegal? Sectoral Disparities and the Dual Labor

Growth of the informal sector of the Senegalese economy may result in a productivity slowdown and could induce a surge in inequality and poverty. The production process is similar for some subsectors of the informal sector and those of the formal one. But there is evidence that the economy is deeply cleaved, between productive and non productive firms in the informal sector and voluntary and involuntary jobs on the labor market that proves to be dual. Education externalities are significant in the informal sector. The differences in human and physical capital account for about two thirds of the output gap.