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Skill formation and job matching effects in wage growth: the case of manufacturing workers in Ethiopia

Author

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  • Taye Mengistae

Abstract

In this paper, I analyse production and labour market data from a random sample of manufacturing firms in Ethiopia in order to test for skill formation and job matching effects in wage growth. Based on estimated labor market experience and job seniority profiles of relative marginal pro¬ductivity and relative wages, I find that both on-the-job skill formation and job matching are significant sources the growth of productivity and wages with time in the labour market. However, there is also evidence in the same data that job matching is by far the more important of the two sources: net mobility gains are at least twice the return to skill formation for workers with at most ten years of time in the labour market.

Suggested Citation

  • Taye Mengistae, 1998. "Skill formation and job matching effects in wage growth: the case of manufacturing workers in Ethiopia," CSAE Working Paper Series 1998-19, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:1998-19
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    File URL: https://ora.ox.ac.uk/objects/uuid:4d0ec6e4-1604-410f-99bb-cc3332548f4d
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    Cited by:

    1. Pieter Serneels, 2004. "The Nature of Unemployment in Urban Ethiopia," CSAE Working Paper Series 2004-01, Centre for the Study of African Economies, University of Oxford.
    2. Pramila Krishnan, 2000. "Public sector pay and private sector wage premiums: testing alternative models of wage determination," CSAE Working Paper Series 2000-07, Centre for the Study of African Economies, University of Oxford.

    More about this item

    Keywords

    human capital formation; wage growth; labour productivity; job matching; job turnover; mobility; Ethiopia;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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