ABSTRACT: The paper investigates the impact of trade on employment outcomes in Kenya's manufacturing sector using firm-level data collected under the auspices of the World Bank's project on regional enterprise development during the period of trade liberalisation. The analysis shows that 36 percent of all the workers in the manufacturing firms were casual or part time workers in 2003. Export-oriented firms generally employed more workers on average, relative to non-exporting firms but the gap has narrowed—the share of employees in exporting firms in total employment declined by over 20 percent between the early 1990s and 2003. Although 36 percent of employees in manufacturing were casual or part-time workers by the latter date, the results show that "exporting" did not significantly influence the proportion of casual workers employed by the firms, although, by virtue of their size, export-oriented firms employed more casual and part time workers than non-exporting ones. There was also a shift of firm employment toward a more skilled labour force during the period of trade liberalization. The combination of an increasingly skilled labour force in Kenya and deepening causalisation among workers, points to a conundrum that requires further analysis. That notwithstanding, the quality of jobs created should be a policy priority. There is need to strengthen and strictly enforce labour regulations governing casual forms of employment.
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