COURSE

MACRO ECONOMICS AND BUSINESS

CODE

UGBS 204

NAME

: GODFRED EDUFUL

I.D

LECTURER

10478798
DR. AGYAPOMAA GYEKE-DAKO

QUESTIONS : 1. WHAT ARE THE FACTORS AFFECTING AVERAGE

PRODUCTIVITY AND LABOUR FORCE IN GHANA AND ITS EFFECT ON
ECONOMIC GROWTH.
2. CAN A COUNTRY ACHIEVE AN INDEFINITE ECONOMIC
GROWTH?

FACTORS AFFECTING AVERAGE PRODUCTIVITY AND THE LABOUR FORCE OF GHANA

AND ITS EFFECTS ON ECONOMIC GROWTH.
Average productivity which refers to output per labour employed have several
factors that affect them which in turn affect a country`s economic growth. Some of
these factors are elaborated below:

A major factor is investment in physical capital. Capital investment is the means by which
human energy is replaced by mechanical power, which raises labour productivity. Capital
investment is also the vehicle through which new methods of production are absorbed into the
capital stock, creating efficiencies of both capital and labour which causes an increase in output
and hence an increase economic growth.
Another determinant of labor productivity is the change in the quality of labor. This suggests that
as the labor force becomes more educated or more experienced, its output is more likely to
increase which causes an upward movement of economic growth.
The third factor influencing productivity is improvement in technologies. When new
technologies are applied to production, they lead to increases in the efficiency of both labour and
capital. With increase in efficiency economic growth is likely to be positive and the reverse is
also true.
Labour force which simply refers to the number of people who are eligible to work
(both the employed and the unemployed) of a country

Child birth and lack of requisite education on the part of women is also a factor affecting
Ghana`s labour force. Estimates indicate that females constitute 51.2% of the total population
and 52.5% of working age population. Yet the labour force participation is dominated by men
because women do get more involved having the constraints already mentioned.
Another factor that affect Ghana`s labour force is high fertility rate which causes an increase in
the entire population. Ghana has experience a decline in its fertility rate but

Economic growth and development require that energy and other resources be extracted from the
environment manufacture goods, provide services, and create capital. Over extraction of nonrenewable resource would lead to its extinction that will deprive future generation access and
hence limit future growth.
Population decline due to high rate of outward migration can limit economic growth since
majority of the labour force would be lost in the process and this will affect productivity and
hence a country`s GDP which in turn will bring economic growth to a halt.
Rising inflation can also limit economic growth in that fast growing countries may experience an
accelerating rate of inflation which can lead to a fall in real income and profits together with
higher costs and also reduced competitiveness in international markets.
Inadequate investment in human capital is a requirement for improving productivity, research
and development and innovation which results in sustained growth. Economic growth might be
limited by skills shortage as businesses seek to expand which forces up average wages and
labour costs.

References
http://tutor2u.net/economics/revision-notes/as-macro-economic-growth.html
http://pdf.usaid.gov/pdf_docs/PNACK909.pdf
http://www.statsghana.gov.gh/pop_stats.html
http://dhsprogram.com/pubs/pdf/FA32/FA32.pdf
http://www.gjeonline.net/pdf/1.%20Alagidede%20et%20al.pdf
http://www.gjeonline.net/pdf/7.%20Baah_Boateng%20et%20al.pdf

ILO 2003