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Rent-sharing, hold-up, and manufacturing wages in Cote d'Ivoire

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Author Info
Azam, Jean-Paul
Ris, Catherine
Abstract

Labor costs in Francophone Africa are considered high by the standards of low-income countries, at least in the formal sector. Are they a brake on industrialization, or the result of successful enterprise development? Are they imposed on firms by powerful unions, or government regulations, or a by-product of good firm performance? The authors empirically analyze what determines manufacturing wages in Cote d'Ivoire, using an unbalanced panel of individual wages that allows them to control for observable firm-specific effects. They test the rent-sharing, and hold-up theories of wage determination, as well as some aspects of efficiency-wage theories. Their results lean in favor of both rent-sharing, and hold-up, suggesting that workers have some bargaining power, and that in Cote d'Ivoire workers can force renegotiation of labor contracts, in response to new investments.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2600.

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Date of creation: 31 May 2001
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Handle: RePEc:wbk:wbrwps:2600

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Keywords: Economic Theory&Research; Public Health Promotion; Health Monitoring&Evaluation; Labor Policies; Environmental Economics&Policies; Economic Theory&Research; Environmental Economics&Policies; Health Monitoring&Evaluation; Health Economics&Finance; Statistical&Mathematical Sciences;

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    Other versions:
  5. Teal, F., 1995. "The Size and Sources of Economic Rents in a Developing Country Manufacturing Labour Market," Working Papers Series 95-6, Centre for the Study of African Economies, University of Oxford.
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  6. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March. [Downloadable!] (restricted)
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  9. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May. [Downloadable!] (restricted)
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  14. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  15. Brunetti, Aymo & Kisunko, Gregory & Weder, Beatrice, 1998. "Credibility of Rules and Economic Growth: Evidence from a Worldwide Survey of the Private Sector," World Bank Economic Review, Oxford University Press, vol. 12(3), pages 353-84, September.
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  16. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March. [Downloadable!] (restricted)
  17. Azam, Jean-Paul, 1997. "Efficiency Wage and the Family: An Explanation for the Impact of the Agricultural Minimum Wage in Morocco," Kyklos, Blackwell Publishing, vol. 50(3), pages 369-82.
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  20. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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