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Employment Vulnerability and Earnings in Urban West Africa

Listed author(s):
  • Philippe Bocquier


    (University of the Witwatersrand,Johannesburg, South Africa)

  • Christophe Nordman


    (DIAL, IRD, Paris)

  • Aude Vescovo


    (IRD, Centre de Recherche Appliquée CERA-AFRISTAT)

(english) In this article, we develop indicators of vulnerability in employment in seven economic capitals of West Africa and study their links with individual incomes from the main job. We draw on data from the 1-2-3 Surveys in 2002-2003 to make a cross-country comparison using rigorously the same variables and methodology for each country. The theory of compensating differentials states that workers may receive pecuniary compensation commensurate with the strenuous or hazardous nature of their tasks or adverse working conditions. Our interpretation of the link between employment status and incomes draws on these developments, applying them to both working conditions themselves and more broadly to vulnerability in employment. The main tested assumption is that high levels of employment vulnerability could be compensated by greater earnings. We allow for individual and job characteristics (the latter being used to construct the composite index of vulnerability) to be differentially valued for conditionally high and low income earners. Our composite index of employment vulnerability indicates that 85% of the private sector workers in all the economic capitals studied are vulnerable on the basis of at least one criterion. The results show that the average impact of vulnerability on earnings is generally negative for an average level of vulnerability. In the formal private sector of the West African cities, losses of income due to vulnerability are lower for high levels of vulnerability, but do not translate into gains. In the informal sector, however, the average predicted income for a high vulnerability level is higher than the average predicted income for a low vulnerability level. Quantitative, distributional and qualitative analyses show that vulnerability compensating mechanism is mainly seen in the informal sector, in the upper tail of the earnings distribution, and particularly in the circumstance of visible underemployment. Employment vulnerability is not compensated for the poorest workers in the private sector of these large west-African cities. _________________________________ (français) Dans cet article, nous construisons des indicateurs de la vulnérabilité au travail dans sept capitales économiques d’Afrique de l’Ouest et étudions leurs liens avec les revenus individuels de l’activité principale. Selon la théorie des salaires compensatoires, les travailleurs pourraient recevoir des compensations pécuniaires à hauteur de la pénibilité de leur tâche ou de leurs conditions de travail. Notre interprétation du lien entre le statut dans l’emploi et le revenu s’inspire de ces développements, en les appliquant non seulement aux conditions de travail proprement dites, mais plus largement à la vulnérabilité dans l’emploi (précarité contractuelle, conditions d’exercice, sous-emploi, emploi de secours inadapté aux caractéristiques individuelles). Notre indicateur composite de la vulnérabilité dans l’emploi révèle que 85% des travailleurs des secteurs privés de l'ensemble des capitales économiques étudiées sont vulnérables selon au moins un de nos critères de vulnérabilité (sur huit critères). L'effet moyen de la vulnérabilité sur les gains est généralement négatif pour un niveau moyen de vulnérabilité. Dans le secteur privé formel, les pertes de revenu causées par la vulnérabilité diminuent pour des hauts niveaux de vulnérabilité, mais ne se transforment pas en gains. Dans le secteur informel en revanche, le revenu prédit moyen pour une vulnérabilité élevée est supérieur à ce revenu pour une vulnérabilité faible. Finalement, nos analyses, qui sont tour à tour quantitative, distributive et « qualitative », montrent que des mécanismes compensatoires de la vulnérabilité dans l’emploi n’existeraient que dans le secteur informel, pour les travailleurs de la partie haute de la distribution des revenus, et en particulier dans le cas du sous-emploi visible. La vulnérabilité dans l’emploi n’est donc pas compensée pour les travailleurs les plus pauvres du secteur privé de ces grandes villes ouest-africaines.

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Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2010/05.

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Length: 49 pages
Date of creation: Feb 2010
Handle: RePEc:dia:wpaper:dt201005
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  1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
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  18. Ralitza Dimova & Christophe J. Nordman & François Roubaud, 2010. "Allocation of Labor in Urban West Africa: Insights from the Pattern of Labor Supply and Skill Premiums," Review of Development Economics, Wiley Blackwell, vol. 14(1), pages 74-92, February.
  19. Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-847, October.
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