Skill Formation and Job Matching Effects in Wage Growth: The Case of Manufacturing Workers in Ethiopia

Taye Mengistae ()

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

Abstract: In this paper, I analyse production and labour market data from a random sample of manufacturing firms in Ethiopia in order to test for skill formation and job matching effects in wage growth. Based on estimated labor market experience and job seniority profiles of relative marginal productivity and relative wages, I find that both on-the-job skill formation and job matching are significant sources the growth of productivity and wages with time in the labour market. However, there is also evidence in the same data that job matching is by far the more important of the two sources: net mobility gains are at least twice the return to skill formation for workers with at most ten years of time in the labour market.

Keywords: HUMAN RESOURCES; WAGES; LABOUR MARKET; PRODUCTIVITY (search for similar items in EconPapers)
JEL-codes: J24 J31 J41 J63 (search for similar items in EconPapers)
Date: 1998
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