1 / 13

Informal Channels and Wages in Senegal's Labor Market

This study explores the impact of informal and formal recruitment channels on wages in Senegal's labor market. It examines the factors influencing the choice of recruitment channels and their effects on wages, including occupational type, social ties, efficiency, work satisfaction, and social support. The study also analyzes the characteristics of firms and employees in the formal sector, highlighting the role of education, experience, age, firm location, and size. The findings shed light on the "remains of informality" in the labor market and raise questions about nepotism, access to formal channels, and their implications for growth.

putnamg
Download Presentation

Informal Channels and Wages in Senegal's Labor Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Remains of Informality in the Formal Sector: Social Networks and Wages in Senegal’s Labour MarketNicoletta Berardi Discussant: Derek Blades

  2. Finding a job • Some people use informal channels to find a job • Others use formal methods • Informal - through friends, family, other social networks….. • Formal - answering vacancy notices, open competition…..

  3. Wage penalties • Does the choice of recruitment channel affect wages? • Are those recruited through informal channels paid more or less than those recruited through formal channels?

  4. Aspects of formal/informal recruitment • Non monetary rewards for informal recruits • Type of occupation • Strength of ties of social group • Efficiency • Work satisfaction • Social support • White collar/blue collar • Skilled/unskilled • Family • Ethnic group - Wolof, Fulani, Serer, Toucouleur, Diola, Mandigo …….. • Shirking • Team spirit • Special skills

  5. Survey • 256 firms and their 1637 employees in Senegal • Registered, tax-paying, formal sector manufacturing companies • 104 mainly hired through formal channels and 152 mainly hired through informal channels

  6. Characteristics of firms

  7. Characteristics of employees

  8. “….the analysis of crude data suggests several potentially relevant dimensions, which are integrated in the theoretical framework.” “….. the rigor of econometrics is necessary to disentangle the relative role played by different variables,…”

  9. The model • Refers to a formal sector firm • Free to recruit a worker through formal channels at the market wage rate • Or to recruit through informal channels in which case the wage rate is negotiated

  10. Some results (1) • Unskilled workers more likely to be hired informally • Managers equally likely to be hired formally or informally • Relatives of manager most likely to be hired informally but substantial wage penalties • Longer educated more likely to be hired formally

  11. Some results (2) • Education and experience positively correlated with higher wages regardless of recruitment channel • People over 40 more likely to have been hired informally • Firms in Dakar more likely to recruit formally • Larger firms more likely to recruit formally

  12. Some thoughts • “Remains of informality” – is it dying out? • IARIW and the communist party as social networks • Renault and village recruitment • Informal sector enterprises • Denied access to formal recruitment channels? • Impediment to growth? • Nepotism – always a bad thing? • Ford, Murdoch, Singapore…..

  13. Characteristics of employees

More Related