The Urban Wage Premium in Africa

Patricia Jones, Olivia D’Aoust and Louise Bernard
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Patricia Jones: Oxford University
Olivia D’Aoust: World Bank
Louise Bernard: Oxford University

A chapter in Wage Inequality in Africa, 2017, pp 33-53 from Palgrave Macmillan

Abstract: Abstract This chapter examines the size and sources of the urban wage premium in three African countries—Nigeria, Tanzania, and Uganda—using panel data on workers for the period 2009–2013. We ask three basic questions. First, is there any evidence that an urban wage premium exists in Africa? Second, what role, if any, does spatial sorting play in explaining this wage premium? And third, which demographic groups benefit the most from agglomeration effects? Our findings present new evidence on the role of cities in Africa. Specifically, we find strong evidence that an urban wage premium exists and is not explained solely by the spatial sorting of more skilled workers into African cities. However, there is considerable heterogeneity in who benefits from agglomeration effects. We find evidence that the urban wage premium is largest for workers in the primate city of each country and, in some cases, non-existent for workers in secondary cities. In addition, the urban wage premium is only found to be significant for male workers in all three countries studied.

Keywords: Urban wage premium; Spatial sorting; Agglomeration effects (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:gpochp:978-3-319-51565-6_3

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DOI: 10.1007/978-3-319-51565-6_3

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