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Wages and Labor Management in African Manufacturing

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  • Marcel Fafchamps
  • Måns 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 Þrm size for both production workers and supervisors. We develop a two-tier model of supervision that can account for this stylized fact and we Þt the structural model to the data. Employee data is used to derive a Þrm-speciÞc wage premium that is purged of the effect of worker observables. We Þnd 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.

Suggested Citation

  • Marcel Fafchamps & Måns Söderbom, 2004. "Wages and Labor Management in African Manufacturing," CSAE Working Paper Series 2004-02, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2004-02
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    Cited by:

    1. Christophe MULLER & Christophe NORDMAN, "undated". "Wages and Human Capital in Exporting Firms in Morocco," Middle East and North Africa 330400044, EcoMod.
    2. Samuel Bowles & Arjun Jayadev, 2004. "Guard Labor: An Essay in Honor of Pranab Bardhan," UMASS Amherst Economics Working Papers 2004-15, University of Massachusetts Amherst, Department of Economics.
    3. 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.
    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. Christophe Muller & Christophe Nordman, "undated". "Task Organization, Human Capital and Wages in Moroccan Exporting Firms," Discussion Papers 08/12, University of Nottingham, CREDIT.
    6. 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.
    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, vol. 1(1), December.

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    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

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