# **Appendix 1. Revision of labor shares**

This Appendix puts together the main tables behind the new labor shares that have been used for the results obtained in this study. Most of the information in the Tables reported below stems from the analytical report of the Integrated Labour Force Survey of 2001 (NBS, 2002a). This source will be denoted as ILFS (NBS, 2002a), henceforth<sup>9</sup> . The sectoral classification in this Appendix necessarily has to follow the one from Tanzanian statistical sources. Correspondences with the 52 sectors of our model are presented in Appendix 2 below. We follow the “standard definition” of employment. This is the definition that the authors from the IFPRI SAM have used (Thurlow and Wobst, 2003). As documented in Kingdon et al. (2004), Tanzania is characterized by an important level of informal employment and a low level of unemployment. This contrasts with the labor market structure of other African economies, where unemployment is more important and the informal sector is small. The “national definition” used in many data from the ILFS (NBS, 2002a) does not seem to be the most suitable one. The “national definition” assumes that an important amount of people that respond as being “employed” in the survey, have in reality an informal or insecure job, and consequently classifies them as “unemployed” (Chapter 6 of the analytical report, NBS, 2002a). Since the ILFS reports the numbers of workers in the informal economy by gender and sector and offers information on their wages, we follow the “standard definition” taking into account their condition of workers in the “informal sector” and do not considered them unemployed.

Table 1A provides the number of female and male workers, as well as female and male children based mainly on the ILFS (NBS, 2002a). These figures are common to the authors of the IFPRI SAM approach and ours. Nevertheless, the only exception is the fact that their measure of children is between 10 and 14 years old. Ours is between 10 and 17 years old and therefore we label it “Young workers”. There is available information on the sectoral allocation (Table 1A) and sectoral wages (see Tables 4A and 5A) only for the latter group of young workers. However, note that we have data on young workers only at the 9-sector (and not at the 16-sector) level. Note also that they are classified by gender, so this factor could be split between males and females.

The number of workers reported in Table 1A combined with the information on their corresponding remunerations (Tables 2-5), are the base for the compensation of employees (or labor remuneration) provided in the subsequent tables. The first step has been to use the information on sectoral wages from Table 2A and the number of workers from Table 1A. We have been careful to allocate different wages to paid-employees and self-employed. This seems very valuable since difficulties in assigning wages to self-employees is one of the main obstacles when trying to derive labor shares (Arpaia, et al., 2009; Guerriero, 2012; ILO, 2010; Gollin, 2002). In two cases we have used the wages in Table 3A for some of the sectors in Table 2A. In particular we have used the wage for paid-employees of “traditional agriculture”, which is lower than the wage for “agriculture/forestry and fishing”. We do the same with the particular wage of “housework duties”, which has been allocated to the workers within the subsector of “other services”, since the workers in “housework duties” are mostly females. The IFPRI authors comment they use the same wage for agricultural workers that we use. For the rest of wages across sectors no comment is made.

The shares were initially calculated using medians (instead of averages) which are also available across sectors and gender, except for the wages of young workers. The resulting shares were very similar to the ones obtained with averages and, therefore, we have kept the average in order to be able to use the average remuneration for young workers (Tables 4 and 5).

> 9 Only for some information about the number of workers in the public sector we have also used a wage survey for the year 2001 from Tanzanian statistics (NBS, 2002c).

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