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Rent-sharing, hold-up, and manufacturing wages in Cote d'Ivoire

Jean-Paul Azam and Catherine Ris ()

No 2600, Policy Research Working Paper Series from The World Bank

Abstract: Labor costs in Francophone Africa are considered high by the standards of low-income countries, at least in the formal sector. Are they a brake on industrialization, or the result of successful enterprise development? Are they imposed on firms by powerful unions, or government regulations, or a by-product of good firm performance? The authors empirically analyze what determines manufacturing wages in Cote d'Ivoire, using an unbalanced panel of individual wages that allows them to control for observable firm-specific effects. They test the rent-sharing, and hold-up theories of wage determination, as well as some aspects of efficiency-wage theories. Their results lean in favor of both rent-sharing, and hold-up, suggesting that workers have some bargaining power, and that in Cote d'Ivoire workers can force renegotiation of labor contracts, in response to new investments.

Keywords: Economic Theory&Research; Public Health Promotion; Health Monitoring&Evaluation; Labor Policies; Environmental Economics&Policies; Economic Theory&Research; Environmental Economics&Policies; Health Monitoring&Evaluation; Health Economics&Finance; Statistical&Mathematical Sciences (search for similar items in EconPapers)
Date: 2001-05-31
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