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2017 | OriginalPaper | Buchkapitel

The Urban Wage Premium in Africa

verfasst von : Patricia Jones, Olivia D’Aoust, Louise Bernard

Erschienen in: Wage Inequality in Africa

Verlag: Springer International Publishing

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Abstract

This chapter examines the size and sources of the urban wage premium in three African countries—Nigeria, Tanzania, and Uganda—using panel data on workers for the period 2009–2013. We ask three basic questions. First, is there any evidence that an urban wage premium exists in Africa? Second, what role, if any, does spatial sorting play in explaining this wage premium? And third, which demographic groups benefit the most from agglomeration effects? Our findings present new evidence on the role of cities in Africa. Specifically, we find strong evidence that an urban wage premium exists and is not explained solely by the spatial sorting of more skilled workers into African cities. However, there is considerable heterogeneity in who benefits from agglomeration effects. We find evidence that the urban wage premium is largest for workers in the primate city of each country and, in some cases, non-existent for workers in secondary cities. In addition, the urban wage premium is only found to be significant for male workers in all three countries studied.

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Vorheriges Kapitel Foreign Direct Investment and Racial Wage Inequality: Evidence from South Africa

Nächstes Kapitel Gender-Based Wage Differentials and Employment in Post-Apartheid South Africa, 1995–2004

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We did estimate the urban wage premium using a fixed effects estimator but found inconsistent results compared to the other estimation techniques we used to identify the importance of sorting in explaining the wage premium. We are happy to provide these results on request.

While Dar es Salaam is the primate city of Tanzania, it is not its political capital. In 1973 the government announced that it was moving the capital to Dodoma. However, the transfer of political administration has been incomplete. A large number of government departments remain in Dar es Salaam and, of course, it remains the business capital and largest city in the country.

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There is evidence from Africa that, on average, workers are paid the value of their marginal product. See Jones (2001). This study, however, covers only a few industries within the manufacturing sector in Ghana.

Real wages are calculated as nominal wages deflated by the Fischer price index for food. To calculate the Fischer price indices, we used price data collected as part of the Living Standards Measurement Survey (LSMS) community surveys in both Tanzania and Uganda. We are grateful to the Uganda Bureau of Statistics (UBOS) for releasing the Uganda price data to us.

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Titel: The Urban Wage Premium in Africa
verfasst von: Patricia Jones
Olivia D’Aoust
Louise Bernard
Verlag: Springer International Publishing
Buch: Wage Inequality in Africa
Print ISBN: 978-3-319-51564-9

Electronic ISBN: 978-3-319-51565-6

Copyright-Jahr: 2017
DOI: https://doi.org/10.1007/978-3-319-51565-6_3