DP6003 Wage Gaps and Job Sorting in African Manufacturing

Author(s): Najy Benhassine , Marcel Fafchamps , Måns Söderbom

Publication Date: December 2006

Keyword(s): gender wage gap , return to education , job selection , Africa , manufacturing

JEL(s): J24 , J31 , O14

Programme Areas: Development Economics

Link to this Page: www.cepr.org/pubs/dps/DP6003.asp

Using matched employer-employee data from eleven African countries, we investigate if there is job sorting in African labor markets. We find that much of the wage gap correlated with education is driven by selection across occupations and firms. This is consistent with educated workers being more effective at complex tasks like labor management. In all countries the education wage gap widens rapidly at high low levels of education. Most of the education wage gap at low levels of education can be explained by selection across occupations. We also find that the education wage gap tends to be higher for women, except in Morocco where many poorly educated women work in the export garment sector. A large proportion of the gender wage gap is explained by selection into low wage occupations and firms.