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Rent-Sharing, Hold Up, and Manufacturing Sector Wages in Côte d’Ivoire

Author

Listed:
  • Jean-Paul Azam

    (IAST - Institute for Advanced Study in Toulouse, UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse)

  • Catherine Ris

    (LARJE - Laboratoire de Recherches Juridique et Economique - UNC - Université de la Nouvelle-Calédonie, UNC - Université de la Nouvelle-Calédonie)

Abstract

Labor costs in Francophone Africa are considered high by the standards of low-income countries, at least in the formal sector. Are they a brake on industrialization, or the result of successful enterprise development? Are they imposed on firms by powerful unions, or government regulations, or a by-product of good firm performance? The authors empirically analyze what determines manufacturing wages in Cote d'Ivoire, using an unbalanced panel of individual wages that allows them to control for observable firm-specific effects. They test the rent-sharing, and hold-up theories of wage determination, as well as some aspects of efficiency-wage theories. Their results lean in favor of both rent-sharing, and hold-up, suggesting that workers have some bargaining power, and that in Cote d'Ivoire workers can force renegotiation of labor contracts, in response to new investments.

Suggested Citation

  • Jean-Paul Azam & Catherine Ris, 2001. "Rent-Sharing, Hold Up, and Manufacturing Sector Wages in Côte d’Ivoire," Post-Print hal-05155223, HAL.
    • Handle: RePEc:hal:journl:hal-05155223
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