Rent-Sharing, Hold-Up, and Manufacturing Wages in Cote d'Ivoire
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 p...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/05/1121293/rent-sharing-hold-up-manufacturing-wages-cote-divoire http://hdl.handle.net/10986/19662 |
| Summary: | 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. |
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