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Private sector development and income dynamics: A panel study of the Tanzanian labour market

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  • Simon Quinn
  • Francis Teal

Abstract

In this paper, we use a three-period panel of Tanzanian households to explore the determinants of earnings and earnings growth from 2004 to 2006. In doing so, we draw particular attention to the role of education and to the importance of heterogeneity between more and less formal occupations. Several important conclusions emerge. Education is found to have a significant convex effect upon earnings levels, but to have had no significant effect upon earnings growth (indeed, there is some suggestion that education may have had a negative impact). This suggests that recent Tanzanian growth may have reflected an ‘unskill-biased technological change’, providing relative reward to informal skills rather than to formal education. Further, there are interesting insights into the age-earnings relationship: the relationship is found significantly to be concave in levels, yet age is not found significantly to have affected earnings growth. This suggests that the concave levels relationship is driven by workers’ participation decisions, rather than by a concave earnings trajectory at the level of the individual worker. Finally, we find significant evidence of variation between formal and informal enterprises, and between sizes of enterprises within these different employment sectors.

Suggested Citation

  • Simon Quinn & Francis Teal, 2008. "Private sector development and income dynamics: A panel study of the Tanzanian labour market," CSAE Working Paper Series 2008-09, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2008-09
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    File URL: http://www.csae.ox.ac.uk/materials/papers/2008-09text.pdf
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    References listed on IDEAS

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    1. Calves, Anne-Emmanuele & Schoumaker, Bruno, 2004. "Deteriorating Economic Context and Changing Patterns of Youth Employment in Urban Burkina Faso: 1980-2000," World Development, Elsevier, vol. 32(8), pages 1341-1354, August.
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    Cited by:

    1. Matteo Rizzo & Blandina Kilama & Marc Wuyts, 2015. "The Invisibility of Wage Employment in Statistics on the Informal Economy in Africa: Causes and Consequences," Journal of Development Studies, Taylor & Francis Journals, vol. 51(2), pages 149-161, February.
    2. Vincent Leyaro & Priscilla Twumasi Baffour & Oliver Morrissey & Trudy Owens, "undated". "Determinants of Urban Labour Earnings in Tanzania, 2000/01-06," Discussion Papers 14/03, University of Nottingham, CREDIT.
    3. Kweka, Josaphat & Fox, Louise, 2011. "The household enterprise sector in Tanzania : why it matters and who cares," Policy Research Working Paper Series 5882, The World Bank.
    4. Sarah Bridges & Louise Fox & Alessio Gaggero & Trudy Owens, "undated". "Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data," Discussion Papers 13/05, University of Nottingham, CREDIT.
    5. Paolo Falco & Andrew Kerr & Pierella Paci & Bob Rijkers, 2014. "Working toward Better Pay : Earning Dynamics in Ghana and Tanzania," World Bank Publications, The World Bank, number 18553.
    6. Fox, Louise & Sohnesen , Thomas Pave, 2012. "Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods," Policy Research Working Paper Series 6184, The World Bank.
    7. Priscilla Twumasi Baffour, "undated". "Determinants of Urban Worker Earnings in Ghana and Tanzania: The Role of Education," Discussion Papers 13/01, University of Nottingham, CREDIT.

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