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

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Author Info

  • Strobl, Eric

    ()
    (Ecole Polytechnique, Paris)

  • Thornton, Robert

    ()
    (Lehigh University)

Abstract

Using comparable data sets for five African countries we estimate, and evaluate possible explanations for, the employer size wage effect across these. Our results indicate, just as has been generally found for other developing and developed nations, that apart from observable worker characteristics most potential 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. Like other developing nations it is, however, larger than that found in the industrialised world, and, unlike the industrialised world, larger for white than blue collar workers. Additionally, data for one of the African countries in conjunction with other tentative evidence suggests that this may in part be because skill biased technology affects the firm size wage distribution across skill groups in developing countries more.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 660.

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Length: 47 pages
Date of creation: Dec 2002
Date of revision:
Handle: RePEc:iza:izadps:dp660

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Keywords: Zimbabwe; Ghana; Cameroon; employer size wage effect; Kenya; Zambia;

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Cited by:
  1. Abigail Barr & Pieter Serneels, 2004. "Wages and Reciprocity in the Workplace," Development and Comp Systems 0409064, EconWPA.
  2. Roubaud, François & Nordman, Christophe Jalil & Nguyen, Huu Chi, 2013. "Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam," Economics Papers from University Paris Dauphine 123456789/12321, Paris Dauphine University.
  3. Soderbom, Mans & Teal, Francis, 2004. "Size and efficiency in African manufacturing firms: evidence from firm-level panel data," Journal of Development Economics, Elsevier, vol. 73(1), pages 369-394, February.
  4. Marcel Fafchamps & Måns Söderbom, 2004. "Wages and Labor Management in African Manufacturing," Economics Series Working Papers WPS/2004-02, University of Oxford, Department of Economics.
  5. Måns Söderbom & Francis Teal & Anthony Wambugu, 2002. "Does firm size really affect earnings?," CSAE Working Paper Series 2002-08, Centre for the Study of African Economies, University of Oxford.
  6. Görg, Holger & Strobl, Eric & Walsh, Frank, 2007. "Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training," CEPR Discussion Papers 6171, C.E.P.R. Discussion Papers.
  7. Nordman, Christophe Jalil & Rakotomanana, Faly & Roubaud, François, 2012. "Informal versus Formal: A Panel Data Analysis of Earnings Gaps in Madagascar," Economics Papers from University Paris Dauphine 123456789/10601, Paris Dauphine University.
  8. Cai, Hongbin & Wang, Miaojun & Yan, Se, 2014. "Why Do Large Firms Willingly Pay High Wages in Developing Countries?," MPRA Paper 53538, University Library of Munich, Germany.
  9. te Velde, Dirk Willem & Morrissey, Oliver, 2003. "Spatial Inequality for Manufacturing Wages in Five African Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  10. Marcel Fafchampsm & Måns Söderbom, 2006. "Wages and Labor Management in African Manufacturing," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).

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