Impact of Digital Technology Adoption on Employment in Senegal

The future of developing countries lies primarily in the intensity of their uptake of digital technologies. Although these new technologies have disrupted the existence of old ones with a possible impact on productivity, employment, and competitiveness in different sectors of activity, there has been little empirical research on this possible impact. The present study aims to fill this gap by examining the impact of digital technology adoption on labour market outcomes, and on employment dynamics in the manufacturing and service sectors in Senegal. Firstly, in order to assess the effect of digital technologies on young people's awareness of public employment programmes and their access to employment, the study applied the propensity score matching method to data obtained from a survey labelled "Improving Employment Policies" (Ameliorer les Politiques d'Emploi, EAPE), which was conducted in 2018 among 2,746 individuals in Senegal. Secondly, in order to measure the effect of digital technology adoption on employment dynamics in the manufacturing and service sectors, the study applied the instrumental variables method to data obtained from a survey called "Determinants of the Performance of Firms in Francophone Sub Saharan Africa: the Case of Senegal" (Determinants de la Performance des Entreprises en Afrique Subsaharienne Francophone: Cas du Senegal), which was conducted in 2014 among 723 firms. The relevance of the present study lies in the fact that it will provide policy makers with guidance on the measures they should take to help young people entering the labour, and private-sector firms with guidance on how to make the most of digital technology diffusion in Senegal. By way of results, the study found that digital technology adoption helped the unemployed youth to participate in solidarity-contract programmes and to continue their active job search efforts, although it did not reduce the duration of their unemployment. It also found that digital technology adoption by Senegalese firms had a positive and significant impact on both the number of people they employed and the number of both their highly skilled and less skilled employees. Specifically, by adopting digital technologies, a firm increased the number of its highly skilled employees by 2.12% and that of its less skilled ones by 2.64%. This corresponds to a 0.52% greater impact for the less skilled employees than for the highly skilled ones.