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Wages and Labor Management in African Manufacturing

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  • Marcel Fafchamps

    (Centre for the Study of African Economies)

  • Måns Söderbom

    (Centre for the Study of African Economies)

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 EconWPA in its series Development and Comp Systems with number 0409043.

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Length: 52 pages
Date of creation: 28 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0409043

Note: Type of Document - pdf; pages: 52
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References

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  1. 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, World Bank Group, vol. 17(3), pages 349-366, December.
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  8. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Patillo & Mans Soderbom & Francis Teal & Albert Zeufack, 1999. "Contract Flexibility and Dispute Resolution in African Manufacturing," CSAE Working Paper Series 1999-20, 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 J. Nordman, 2013. "Task Organization, Human Capital and Wages in Moroccan Exporting Firms," Working Papers, HAL halshs-00854522, HAL.
  2. 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, Springer, vol. 36(3), pages 323-335, April.
  3. Marcel Fafchamps, 2007. "Human Capital, Exports, and Wages," Economics Series Working Papers, University of Oxford, Department of Economics GPRG-WPS-069, University of Oxford, Department of Economics.
  4. Jellal, Mohamed, 2014. "Firmes industrielles incitations et formation approche théorique
    [Industrial firms incentives and training Policy theoretical approach]
    ," MPRA Paper 57306, University Library of Munich, Germany.
  5. Arjun Jayadev & Samuel Bowles, 2004. "Guard Labor: An Essay in Honor of Pranab Bardhan," Working Papers, Political Economy Research Institute, University of Massachusetts at Amherst wp90, Political Economy Research Institute, University of Massachusetts at Amherst.
  6. Guiying (Laura) Wu, 2013. "Investment Frictions and the Aggregate Output Loss in China," Economic Growth centre Working Paper Series, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre 1307, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
  7. 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, African Association of Agricultural Economists, vol. 1(1), December.
  8. Christophe Muller & Christophe Nordman, 2006. "Wages and Human Capital in Exporting Firms in Morocco," Working Papers, DIAL (Développement, Institutions et Mondialisation) DT/2006/06, DIAL (Développement, Institutions et Mondialisation).
  9. Arne Bigsten & Mans Söderbom, 2006. "What Have We Learned from a Decade of Manufacturing Enterprise Surveys in Africa?," World Bank Research Observer, World Bank Group, World Bank Group, vol. 21(2), pages 241-265.
  10. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.
  11. 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.
  12. 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.
  13. 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), University of Warwick, Department of Economics 796, University of Warwick, Department of Economics.
  14. Benhassine, Najy & Fafchamps, Marcel & Söderbom, Måns, 2006. "Wage Gaps and Job Sorting in African Manufacturing," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6003, C.E.P.R. Discussion Papers.

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