Ethnicity and Wage Determination in Ghana

A. Barr and A. Oduro

Working Papers Series from Centre for the Study of African Economies, University of Oxford

Abstract: This paper looks at earnings differentials between (1) members of different ethnic groups and (2) employers' relatives, unrelated co-ethnics, and other workers, in the Ghanaian manufacturing sector. We find that a significant proportion of the identified earnings differentials between ethnic groups can be explained with reference to a fairly standard set of observed workers' characteristics. Labour market segregation along ethnic lines combined with considerable variation in employer characteristics (possibly due to discrimination in other markets) accounts for most of the remaining differentials. There is no evidence of statistical discrimination between ethnic groups, although there is evidence of such discrimination in favour of inexperienced co-ethnic workers, who can be more easily assessed and matched to jobs than similar workers from other ethnic groups. Finally, workers who are related to their employers earn a considerable premium, possibly because they contribute more than their fellow workers to productivity.

Keywords: WAGES; ETHNIC GROUPS; MANUFACTURING INDUSTRIES; DEVELOPING COUNTRIES (search for similar items in EconPapers)
JEL-codes: J30 J31 J70 O55 (search for similar items in EconPapers)
Date: 2000

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