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Do Large Employers Pay More? The Case Of Five Developing African Countries

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  • Eric Strobl

    (CORE, Universite Catholique de Louvain)

  • Robert Thornton

    ()
    (Department of Economics, Lehigh University)

Abstract

Using comparable data sets for five African countries, we evaluate possible explanations for the employer-size wage effect across these countries. Our results indicate that, apart from observable worker characteristics, most theories cannot explain very much of the wage premium received in larger firms. Moreover, we find that the employer-size wage effect does not differ greatly across the five African countries. As is the case with other developing nations, however, the effect is larger than that found in the industrialised world, though unlike the industrialised world it is larger for white collar workers than for blue collar workers. Data for one of the African countries, in conjunction with other evidence, suggest that this may in part be the result of skill-biased technology having a greater effect on the firm¡¯s size-wage distribution across skill groups in developing countries.

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Bibliographic Info

Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

Volume (Year): 29 (2004)
Issue (Month): 1 (June)
Pages: 137-161

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Handle: RePEc:jed:journl:v:29:y:2004:i:1:p:137-161

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Keywords: Employer Size Wage Effect; Firm Size Wage Premium;

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  1. Miguel Marcelle & Eric Strobl, 2003. "Do Smaller Firms Pay Less in the Caribbean? The Case of Trinidad and Tobago," Journal of Development Studies, Taylor & Francis Journals, vol. 39(5), pages 181-198.
  2. Aitken, B. & Harrison, A. & Lipsey, R.E., 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States," Papers 95-21, Columbia - Graduate School of Business.
  3. repec:fth:stanho:e-95-7 is not listed on IDEAS
  4. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
  5. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
  6. Schaffner, Julie Anderson, 1998. "Premiums to employment in larger establishments: evidence from Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 81-113, February.
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