Wages and Unemployment in Urban Cote d'Ivoire

John Hoddinott

No 1993-03, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Two sector development models, such as Harris-Todaro (1970), assume a positive relationship between urban wages and unemployment. This paper claims that this orthodoxy is wrong. Drawing on data from Côte d'Ivoire, it argues that urban wages are depressed by higher levels of unemployment. Further, urban labour markets in this west African country behave in a fashion remarkably similar to the United States, Britain, Canada and other Developed Countries. Altering the model specification or level of aggregation does not qualitatively alter this finding. These results are consistent with the model of wage determination developed by Shapiro and Stiglitz (1984) and Blanchflower and Oswald (1992).

Date: 1993
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Published in 'Wages and Unemployment in an Urban African Economy', Economic Journal, Vol 106, pp1610-1626, 1996

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