William J. House

Labor Market Choices, Earnings, and Informal Networks in Khartoum, Sudan*

A micro-economic labor force model was used to explain the relationship between five labor market segments and earnings in Khartoum Sudan. The assumption was that individuals maximized their earnings by comparing the rewards of working in alternative and mutually exclusive segments of the labor market. The polychotomous choice model allowing for unobserved factors used the Hay-Dubin and McFadden extension of Heckmans technique for correcting for selection bias. Data were obtained from a private survey conducted by the authors during 1988-89. The sample included 1756 small-scale enterprises and 1505 self-employed workers and 2572 employees in the informal sector and 8037 workers in 170 formal sectors firms: 12114 workers. The five segments included public sector employment in the formal sector private sector employment in the formal sector (private large) self-employed in the informal sector informal sector employees working in permanent structures (private small) and informal sector employees working for unlicensed firms without a permanent structure (unprotected workers). Earnings were lowest in the unprotected segment and highest among self-employed businessmen. The model supported the view that private and large employers hired the best workers. Findings supported Kannapans hypothesis that informal networks based on ethnicity were important in determining access to urban labor markets. A high correlation was found between province of birth of the employer and employees. The public sector earnings model had the highest degree of explanatory power of earnings differences. Wages in the private small and unprotected segments were also determined by education. The findings suggested that studies of the rate of return to education should account for how social networks affect the probability of workers obtaining employment in a particular segment and should account for fixed wage rates in particular segments.

The determinants of and changes in the structure of wages and employment in the manufacturing sector of the Kenyan economy, 1967-1972

Abstract The purpose of this paper is to consider explicitly the structure of both employment and earnings in the manufacturing sector of the Kenyan economy. This includes a description of the structure of wages, an attempt to explain the determinants of the structure, and an attempt to determine the nature of the cause-and-effect relationships between wages and changes in employment. Also, the responsiveness of the structure of wages and employment to changes in industry demand for labour is considered.

The changing fortunes of an aristocracy? Determinants of wages and conditions of employment in Kenya

Abstract This article examines the functioning of the labour market in the modern sector in Kenya and, in particular, considers the determinants of wages and other conditions of employment. An analysis of negotiated wages from collective agreements signed during 1974–75 suggests that measures of an ‘ability to pay’ characteristic of industries with limited competition in the product market and realizing above-average labour productivity are the best predictors of inter-industry wage differences. Locational and ownership variables are also found to be significant. Size of labour force is only significant for clerical wage rates. Four case studies suggest superior conditions of employment are positively associated with higher than average wages.