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Wages and Labor Management in African Manufacturing

  • Marcel Fafchamps
  • Måns Söderbom

Using matched employer-employee data on 10 African countries, this paper examines the rela- tionship 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 super- vision 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. La- bor 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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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2004-02.

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Date of creation: 2004
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Handle: RePEc:csa:wpaper:2004-02
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  18. Paul Collier & Marcel Fafchamps & Francis Teal & Stefan Dercon, 1998. "Rates of return on physical and human capital in Africa`s manufacturing sector," Economics Series Working Papers WPS/1998-12, University of Oxford, Department of Economics.
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