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Are wages and productivity in Zimbabwe affected by human capital investment and international trade?

Author

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  • Verner, Dorte

Abstract

To analyze what determines wages and productivity in Zimbabwe, the author analyzes an employer/employee data-set from Zimbabwe's manufacturing sector. The author finds that: * Formal education, training, and experience positively affect wages and productivity positively. * Women are paid roughly 37 percent less than men although they are not measurably less productive. * There is no strong indication of ethnic discrimination among employees, but Europeans are being paid more in larger firms, although they are marginally less productive than workers of African origin. * The wage premium for workers who completed secondary school does not necessarily reflectgreater productivity but may indicate a shortage of educated workers. * Workers trained in-house earn more although in-house training does not instantly affect productivity. Training by outside trainers does improve productivity but is not rewarded with higher wages. * Apprentices are paid more than non-apprentices. Perhaps an apprentice diploma serves as a screening device, when hiring. * Temporary workers are more productive than permanent workers, perhaps hoping to get a permanent contract. * Union members earn less than non-union members despite being more productive. Perhaps union members fight more to have skills upgraded than for wage increases. * Larger exporting firms are marginally less productive and pay marginally less than the average firm, but ar more productive than smaller firms (and their wages match productivity). Workers in larger woods and metals are paid less than workers in smaller firms, although they are not less productive. * Exporting firms benefit more than employees do from trade openness and greater productivity. * Foreign-owned firms are more productive than other firms (perhaps because of new technology). * Firms that employ more expatriates tend to pay more. The more expatriates there are in metals firms, the more productive the employees are, perhaps because the expatriates bring knowledge about new technology to the enterprise. * Employees in the metal and textile sectors are paid more than those in the food sector, but employees in metals are less productive than employees from other sectors.

Suggested Citation

  • Verner, Dorte, 1999. "Are wages and productivity in Zimbabwe affected by human capital investment and international trade?," Policy Research Working Paper Series 2101, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2101
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    References listed on IDEAS

    as
    1. Velenchik, Ann D., 1997. "Government intervention, efficiency wages, and the employer size wage effect in Zimbabwe," Journal of Development Economics, Elsevier, vol. 53(2), pages 305-338, August.
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    5. Adams, Jennifer M., 1991. "Female wage labor in rural Zimbabwe," World Development, Elsevier, vol. 19(2-3), pages 163-177.
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    7. Biggs, T. & Shah, M. & Srivastava, P., 1995. "Technological Capabilities and Learning in African Enterprises," Papers 288, World Bank - Technical Papers.
    8. Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, pages 241-275.
    9. Hellerstein, Judith K & Neumark, David & Troske, Kenneth R, 1999. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 409-446, July.
    10. Pack, Howard, 1993. "Productivity and industrial development in sub-Saharan Africa," World Development, Elsevier, vol. 21(1), pages 1-16, January.
    11. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    12. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
    13. Booth, Alison L & Chatterji, Monojit, 1997. "Training and Unions," CEPR Discussion Papers 1573, C.E.P.R. Discussion Papers.
    14. Velenchik, Ann D., 1997. "Market power, firm performance and real wage growth in Zimbabwean manufacturing," World Development, Elsevier, vol. 25(5), pages 749-762, May.
    15. Steel, William F & Webster, Leila M, 1992. "How Small Enterprises in Ghana Have Responded to Adjustment," World Bank Economic Review, World Bank Group, vol. 6(3), pages 423-438, September.
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    Citations

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    Cited by:

    1. Beatriz Muriel, 2011. "Rethinking Earnings Determinants in the Urban Areas of Bolivia," Development Research Working Paper Series 06/2011, Institute for Advanced Development Studies.
    2. Verner, Dorte, 2005. "Wage determination in Northeast Brazil," Policy Research Working Paper Series 3548, The World Bank.
    3. Richard K. Johanson & Arvil V. Adams, 2004. "Skills Development in Sub-Saharan Africa," World Bank Publications, The World Bank, number 15028.
    4. Lopez-Acevedo, Gladys & Tinajero, Monica & Rubio, Marcela, 2005. "Mexico : human capital effects on wages and productivity," Policy Research Working Paper Series 3791, The World Bank.
    5. Nicolai Kristensen & Dorte Verner, 2008. "Labor Market Distortions in Côte d'Ivoire: Analyses of Employer‐Employee Data from the Manufacturing Sector," African Development Review, African Development Bank, vol. 20(3), pages 343-377.
    6. Lopez-Acevedo, Gladys, 2003. "Wages and productivity in Mexican manufacturing," Policy Research Working Paper Series 2964, The World Bank.
    7. Verner, Dorte, 1999. "Wage and productivity gaps - evidence from Ghana," Policy Research Working Paper Series 2168, The World Bank.

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