ABSTRACT
Several questions in the RPED surveys regarding firm growth enable us to carry out our analysis. Entrepreneurs and managers were asked about the year that the firm began operating, as well as about their initial employment and sales. Firms were also asked about their employment levels for the early and mid-1980s, which corresponds to the period during which several African countries had begun to implement major structural adjustment reforms. The data in the survey, particularly the recall data, are much more accurate for employment than sales for several reasons. Employment is not sensitive to inflation, which makes it easy to handle and much more reliable than the value based figures such as annual sales, that are inherently subject to many factors such as sector and firm specific price changes. Furthermore, employment is a primary target of many policymaking initiatives. Hence the analysis of firm growth is done using changes in employment as the dependent variable.
