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Wages and Labor Management in African Manufacturing

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  • Marcel Fafchamps
  • MÃ¥ns Söderbom

Abstract

Using matched employer-employee data on 10 African countries, this paper examines the relationship beween wages, worker supervision, and labor productivity in manufacturing. Wages increase with firm size for both production workers and supervisors. We develop a two-tier model of supervision that can account for this stylized fact and we fit the structural model to the data. Employee data is used to derive a firm-specific wage premium that is purged of the effect of worker observables. We find a strong effect of both supervision and wages on effort and hence on labor productivity. Labor management in sub-Saharan Africa appears problematic, with much higher supervisor-to-worker ratios than in Morocco and a higher elasticity of effort with respect to supervision.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2004-02.

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Date of creation: 01 Feb 2004
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Handle: RePEc:oxf:wpaper:wps/2004-02

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References

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  1. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Pattillo & Mans Söderbom & Francis Teal & Albert Zeufack, 2003. "Risk Sharing in Labour Markets," Tinbergen Institute Discussion Papers 03-077/2, Tinbergen Institute.
    • Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Pattillo & Mans S–derbom & Francis Teal & Albert Zeufa, 2003. "Risk Sharing in Labor Markets," World Bank Economic Review, World Bank Group, vol. 17(3), pages 349-366, December.
  2. Marcel Fafchamps & Said El Hamine & Albert Zeufack, 2004. "Learning to Export: Evidence from Moroccan Manufacturing," Development and Comp Systems 0409049, EconWPA.
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  5. Marcel Fafchamps & Bart Minten, 1999. "Property rights in a flea market economy," CSAE Working Paper Series 1999-25, Centre for the Study of African Economies, University of Oxford.
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Citations

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Cited by:
  1. Christophe Muller & Christophe Nordman, 2005. "Wage And Human Capital In Exporting Firms In Morocco," Working Papers. Serie AD 2005-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Fox, Louise & Oviedo, Ana Maria, 2008. "Are skills rewarded in Sub-Saharan Africa ? determinants of wages and productivity in the manufacturing sector," Policy Research Working Paper Series 4688, The World Bank.
  3. Christophe Muller & Christophe Nordman, . "Task Organization, Human Capital and Wages in Moroccan Exporting Firms," Discussion Papers 08/12, University of Nottingham, CREDIT.
  4. Marcel Fafchamps & Mans Söderbom & Najy Benhassine, 2009. "Wage Gaps and Job Sorting in African Manufacturing," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 824-868, November.
  5. Guiying (Laura) Wu, 2013. "Investment Frictions and the Aggregate Output Loss in China," Economic Growth centre Working Paper Series 1307, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
  6. Paul Beaudry & Patrick Francois, 2010. "Managerial Skills Acquisition and the Theory of Economic Development," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 90-126.
  7. Bigsten, Arne & Soderbom, Mans, 2005. "What have we learned from a decade of manufacturing enterprise surveys in Africa ?," Policy Research Working Paper Series 3798, The World Bank.
  8. Arjun Jayadev & Samuel Bowles, 2004. "Guard Labor: An Essay in Honor of Pranab Bardhan," Working Papers wp90, Political Economy Research Institute, University of Massachusetts at Amherst.
  9. Tetsushi Sonobe & John Akoten & Keijiro Otsuka, 2011. "The growth process of informal enterprises in Sub-Saharan Africa: a case study of a metalworking cluster in Nairobi," Small Business Economics, Springer, vol. 36(3), pages 323-335, April.
  10. Fafchamps, Marcel & Gabre-Madhin, Eleni Z., 2006. "Agricultural markets in Benin and Malawi," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 1(1), December.
  11. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.
  12. Perroni, Carlo & Proto, Eugenio, 2007. "Moral Hazard and Entrepreneurial Failure in a Two-sector Model of Productive Matching - with an Application to the Natural Resource Curse," The Warwick Economics Research Paper Series (TWERPS) 796, University of Warwick, Department of Economics.
  13. Marcel Fafchamps, 2007. "Human Capital, Exports, and Wages," Economics Series Working Papers GPRG-WPS-069, University of Oxford, Department of Economics.

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