Christophe Jalil Nordman

Kinship ties and entrepreneurship in Western Africa

Small entrepreneurs in poor countries achieve relatively high marginal returns to capital but show only low re-investment rates. The literature is rather inconclusive about the possible causes. We explore whether ‘forced redistribution’, i.e. abusive demands by the kin, affects the allocation of capital and labor to the household firm. We use an original data-set covering household firms in seven economic centers in Western Africa. We find some evidence that family and kinship ties within the city rather enhance labor effort and the use of capital. However, the stronger the ties to the village of origin the lower input use which is supporting the ‘forced redistribution’ hypothesis. Given that such redistribution is partly the consequence of a lack of formal insurance mechanisms, these results suggest that the provision of health insurance and other insurance devices may have positive indirect effects on private sector development.

Reassessing the Gender Wage Gap in Madagascar: Does Labor Force Attachment Really Matter?

In the labor economics literature, it has been argued that differences in labor force attachment across gender are important to explain the extent of the gender wage gap. However, measures of women’s work experience are particularly prone to errors given discontinuity in labor market participation. Using proxy measures such as potential experience may lead to biased estimates of the returns to human capital. Such biases cannot be ignored since these returns are used in the standard decomposition techniques to measure the extent of gender‐based wage discrimination. By matching two original surveys conducted in Madagascar in 1998—a labor force survey and a biographical survey—we built a unique data set that enabled us to combine the original information gathered from each of them, particularly the earnings from current employment and the entire professional trajectories. Our results lead to a reassessment of the returns to human capital as potential experience always exceeds actual experience for both males and females. By using actual experience, we obtain a significant increase in the portion of the gender earnings gap explained by observable characteristics, while the differences in average actual experience across sexes lead to markedly different estimates of the fraction of the gender gap explained by experience.

Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam

Abstract In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal–informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers’ job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting Vietnam’s labour market specificity.

Which Human Capital Matters for Rich and Poor’s Wages?Evidence from Matched Worker-Firm Data from Tunisia

In this paper, we study the return to human capital variables for wages of workers observed in Tunisian matched worker-firm data in 1999. This reveals us how returns to human capital in a Less Developed Country like Tunisia may differ from the industrial countries usually studied with matched data. We develop a new method based on multivariate analysis of firm characteristics, which allows us most of the benefits obtained by introducing firm dummies in wage equations for studying the effect of education. It also provides a human capital interpretation of the effect of these dummy variables. Moreover, in the studied data, using three firm characteristics easily collectable yields results close to those obtained by using the matched structure of the data. The workers with low wages or low conditional wages experience greater returns to human capital than workers belonging to the middle of the wage distribution, while their return to schooling is significantly lower than that of high wage workers. The estimates support the hypothesis that human capital is associated with positive intra-firm externality on wages. Therefore, a given worker would be more productive and better paid in an environment strongly endowed in human capital. However, the low wage workers do not take advantage of the human capital in the firm. Conversely, the low wage workers benefit from working in the textile sector in terms of wages unlike the middle and high wage workers. Finally, the low wage workers and high wage workers benefit from an innovative environment, while the middle wage workers do not.

Theory and Evidence on the Glass Ceiling Effect Using Matched Worker-firm Data

(english) In this paper, we investigate the glass ceiling hypothesis according to which there exists larger gender wage gaps at the upper tail of the wage distribution. We demonstrate that in some circumstances, more qualified women may be offered lower wages than men at the equilibrium. This occurs for instance in a competitive model of wage determination where employers face gender-specific probabilities concerning the stability of their employees in their firms. Then, we focus on the relevance and the magnitude of the glass ceiling effect in France using a representative matched worker-firm data set in 1992 of about 130,000 employees and 14,000 employers. We estimate quantile regressions and use a principal component analysis to summarize information specific to the firms. Our different results show that accounting for firm-related characteristics, in particular firm-specific wage policies, reduces the gender earnings gap at the top of the distribution, but the latter still remains much higher at the top than at the bottom. _________________________________ (francais) Nous analysons l’existence du phenomene de “plafond de verre” selon lequel il existerait des ecarts salariaux selon le genre plus importants dans le haut de la distribution des revenus. Nous montrons dans un modele competitif de determination des salaires que, sous certaines hypotheses et a l’equilibre, les femmes les plus qualifiees recoivent des salaires plus faibles que ceux des hommes de meme niveau de qualification. Cela se produit si les employeurs apprecient differemment selon le sexe des employes la stabilite des travailleurs dans leur entreprise. Nous examinons ensuite la pertinence de cette hypothese et l’etendue de l’effet de plafond de verre a l’aide de donnees representatives de l’industrie privee francaise en 1992 liant quelque 130.000 employes a plus de 14.000 etablissements. Nous estimons des regressions de quantiles et utilisons une analyse factorielle pour resumer les informations specifiques a chaque etablissement. Nos differents resultats montrent que prendre en compte les caracteristiques des etablissements, en particulier leur politique salariale specifique, reduit l’estimation de l’ecart de revenus entre sexes en haut de la distribution, mais celui-ci n’en demeure pas moins beaucoup plus important en haut qu’en bas de cette distribution des revenus.

Where Does Education Pay Off in Sub-Saharan Africa? Evidence from Two Cities of the Republic of Congo

Using first-hand data from the 2009 Employment and Informal Sector Survey (EESIC) in the two largest cities of the Republic of Congo, Brazzaville and Pointe-Noire, we analyse the impact of education on labour market outcomes, and identify the segments where education pays off the most. Multivariate analyses of the risk of unemployment and sectoral choice indicate that young people face serious difficulties in the labour market: for most of them, their only choice is to remain unemployed or to join the informal sector. To measure the specific impact of schooling on earnings, we address issues related to sample selection and endogeneity of education in the earnings function. The results shed light on heterogeneity in the returns to schooling across the two main cities and institutional sectors. An important finding is that the informal sector does not systematically lag behind the formal sectors in terms of returns to education. We emphasize convex returns to education, meaning that the last years in secondary and tertiary schooling yield the highest returns, while those of primary education are generally lower. This convexity is also apparent in the informal sector, where education (albeit on another scale) again appears as an important determinant of earnings.

Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam

Abstract Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households’ and entrepreneurs’ social networks and business performance. We address two related questions. The first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on business technical efficiency. The hypothesis is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realise a lower output than what could be possible with the same amount of resources. We find evidence of a marginal productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We also stress the importance of professional networks for successful entrepreneurship.

Wages and On-the-Job Training in Tunisia

Training costs may hamper intra-firm human capital accumulation. As a consequence, firms may be tempted to have workers pay for their on-the-job training (OJT). In this paper, we analyse the links of OJT and worker remuneration in the suburb of Tunis, using case study data for eight firms. We find that the duration of former OJT negatively influences starting wages, while there is no anticipated effect of future training on wages at the firm entry. In contrast, current wages are positively affected by former OJT but negatively affected by ongoing OJT. These results provide very rare empirical support in Less Developed Countries (LDCs) for classical human capital theories and cost sharing theories applied to OJT.