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This Palgrave Pivot features original research studies of wage inequality in African countries including South Africa, Nigeria, Tanzania, and Uganda. The contributors examine gender and racial wage differentials, as well as the effects of urbanization and globalization on inequality in wages and earnings. They also examine the extent to which human capital factors such as education and experience contribute to the significant wage differentials that exist in African countries.




The studies presented in this book all deal with wage inequality in various African nations. Each addresses a different, but related, aspect of wage inequality. All have something to say about race and/or gender aspects of wage inequality. Each chapter included in this volume is an original empirical research study which attempts to measure and explain sources of wage inequality in the country or countries studied. To conduct such studies, it is necessary to have large national representative samples of households and workers. In each case the authors have used, and in some cases constructed, data sets that meet these requirements.
Shirley Johnson-Lans

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

This chapter addresses two questions related to the post-apartheid surge of multinational activity in South Africa. Was the influx of foreign investment associated with a widening or reducing of the wage gap between black and white workers? And second, what impact, if any, has greater foreign investment had on the degree of market concentration in the country? Both questions are investigated using a merged data set from South Africa which covers the period 1995–2004 and thus spans the first decade of democratic government. The results indicate that foreign direct investment (FDI) has been associated with a decrease in the racial wage gap during the post-apartheid decade, more particularly in the first five (Mandela) years. A 10 percent greater ratio of FDI to capital stock in an industrial sector, for example, is associated with about a 1 percent smaller racial wage gap. Moreover, there is evidence that FDI is negatively correlated with market power at the two-digit industry level¸ thus providing a mechanism that probably enhanced the public policies of that period to reduce racial discrimination, given a Becker-type explanation that reduced market power tends to decrease the level of discrimination that can be engaged in by employers and/or employees.
Shirley Johnson-Lans, Patricia Jones

The Urban Wage Premium in Africa

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.
Patricia Jones, Olivia D’Aoust, Louise Bernard

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

This chapter investigates the trends in gender differentials in wages and employment over the first post-apartheid decade in South Africa, a time when social policy was focused on race. Using merged household and worker data sets, a two-stage regression estimation strategy is used to construct gender-based wage differentials, controlling for industry, occupation, region, and demographic and human capital variables (years of education, experience, and experience squared). The resulting male/female log wage differentials are the dependent variables in the second-stage regressions. The effect of labor force characteristics (within-sector proportion unionized, proportion black, proportion female, average hours worked per week, and average years of experience), industrial sector, and globalization (measured by foreign direct investment/capital stock in sector and year) on these wage differentials is investigated. The study finds some evidence of a decline in the gender wage gap over the period 1995–2004. And as is true in many other economies, women appear to do less well, for example, there is a wider gender gap in wages, in environments where workers have higher average levels of skill or experience. Regressions are also run on female/male employment ratios, using a similar set of control variables. Evidence is found, at least for white workers, that the proportion of women in the employed labor force increases over the decade. The effects of unionization and globalization on employment of women are also investigated.
Shirley Johnson-Lans


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