Minimum Wages in Sub-Saharan Africa : A Primer

The fraction of workers currently covered by minimum wages in Sub-Saharan Africa (SSA) is small, but as formality and urbanization increase, wage regulation will become increasingly relevant. In this analysis, we find that higher minimum wage values are associated with higher levels of GDP per capit...

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Main Authors:	Bhorat, Haroon, Kanbur, Ravi, Stanwix, Benjamin
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2018
Subjects:	MINIMUM WAGE ECONOMIC GROWTH LIVING STANDARDS RURAL FINANCE YOUTH EMPLOYMENT LABOR MARKET LABOR FORCE
Online Access:	http://hdl.handle.net/10986/30139

id	okr-10986-30139
recordtype	oai_dc
spelling	okr-10986-301392021-05-25T10:54:40Z Minimum Wages in Sub-Saharan Africa : A Primer Bhorat, Haroon Kanbur, Ravi Stanwix, Benjamin MINIMUM WAGE ECONOMIC GROWTH LIVING STANDARDS RURAL FINANCE YOUTH EMPLOYMENT LABOR MARKET LABOR FORCE The fraction of workers currently covered by minimum wages in Sub-Saharan Africa (SSA) is small, but as formality and urbanization increase, wage regulation will become increasingly relevant. In this analysis, we find that higher minimum wage values are associated with higher levels of GDP per capita, in both SSA and non-SSA countries. Using two measures to assess the level at which minimum wages are set, we find that minimum wages in SSA countries are on average lower—relative to average wages—than most other comparable regions of the world. Thus, SSA as a whole reflects no particular bias toward a comparatively more pro–minimum wage policy. Within SSA, however, we observe that low-income countries set relatively higher minimum wages than middle- or upper-income countries. We find significant variation in the detail of minimum wage regimes and schedules in the region, as well as large variations in compliance. Notably, several countries in SSA have relatively complex minimum wage schedules, and on average we find high levels of noncompliance among covered workers. We also summarize the limited research on the employment effects of minimum wages in SSA, which are consistent with global results. By and large, introducing and raising the minimum wage appears to have small negative employment impacts or no statistically significant negative impacts. There are country studies, however, where substantial negative effects on employment are reported—often for specific cohorts. The release of country-level earnings and employment data at regular intervals lies at the heart of a more substantive, country-focused minimum wage research agenda for Africa. 2018-08-06T15:43:44Z 2018-08-06T15:43:44Z 2017-02 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/30139 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research Africa Sub-Saharan Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	MINIMUM WAGE ECONOMIC GROWTH LIVING STANDARDS RURAL FINANCE YOUTH EMPLOYMENT LABOR MARKET LABOR FORCE
spellingShingle	MINIMUM WAGE ECONOMIC GROWTH LIVING STANDARDS RURAL FINANCE YOUTH EMPLOYMENT LABOR MARKET LABOR FORCE Bhorat, Haroon Kanbur, Ravi Stanwix, Benjamin Minimum Wages in Sub-Saharan Africa : A Primer
geographic_facet	Africa Sub-Saharan Africa
description	The fraction of workers currently covered by minimum wages in Sub-Saharan Africa (SSA) is small, but as formality and urbanization increase, wage regulation will become increasingly relevant. In this analysis, we find that higher minimum wage values are associated with higher levels of GDP per capita, in both SSA and non-SSA countries. Using two measures to assess the level at which minimum wages are set, we find that minimum wages in SSA countries are on average lower—relative to average wages—than most other comparable regions of the world. Thus, SSA as a whole reflects no particular bias toward a comparatively more pro–minimum wage policy. Within SSA, however, we observe that low-income countries set relatively higher minimum wages than middle- or upper-income countries. We find significant variation in the detail of minimum wage regimes and schedules in the region, as well as large variations in compliance. Notably, several countries in SSA have relatively complex minimum wage schedules, and on average we find high levels of noncompliance among covered workers. We also summarize the limited research on the employment effects of minimum wages in SSA, which are consistent with global results. By and large, introducing and raising the minimum wage appears to have small negative employment impacts or no statistically significant negative impacts. There are country studies, however, where substantial negative effects on employment are reported—often for specific cohorts. The release of country-level earnings and employment data at regular intervals lies at the heart of a more substantive, country-focused minimum wage research agenda for Africa.
format	Journal Article
author	Bhorat, Haroon Kanbur, Ravi Stanwix, Benjamin
author_facet	Bhorat, Haroon Kanbur, Ravi Stanwix, Benjamin
author_sort	Bhorat, Haroon
title	Minimum Wages in Sub-Saharan Africa : A Primer
title_short	Minimum Wages in Sub-Saharan Africa : A Primer
title_full	Minimum Wages in Sub-Saharan Africa : A Primer
title_fullStr	Minimum Wages in Sub-Saharan Africa : A Primer
title_full_unstemmed	Minimum Wages in Sub-Saharan Africa : A Primer
title_sort	minimum wages in sub-saharan africa : a primer
publisher	Published by Oxford University Press on behalf of the World Bank
publishDate	2018
url	http://hdl.handle.net/10986/30139
_version_	1764471305922412544

Minimum Wages in Sub-Saharan Africa : A Primer

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