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WP 201503 - Minimum Wages in Sub-Saharan Africa: A Primer

Author: 
Haroon Bhorat, Ravi Kanbur, Ben Stanwix

Date of Publication: 
June 2015

Abstract:

In this paper we provide a basic overview of minimum wage regimes in Sub Saharan Africa (SSA) where data are available, as well as some more detailed work for several countries using household survey data. We begin by providing a brief literature review of more recent minimum wage work, and build on Neumark and Wascher's (2007) meta-review to provide an updated overview of the empirical wage-employment trade-off estimates, focused on LMI countries. We document the level of minimum wages in the region, and present simple Kaitz ratios and use this to make comparisons with wage levels and ratios elsewhere in the world. We then proceed to examine compliance levels in seven SSA countries using household survey data, and again compare the outcomes to estimates for a selection of non-SSA LMI countries. We end by reflecting on possible early lessons for wage-setting regimes in the region, and the research agenda to inform the policy makers on key trade-offs in minimum wage setting.

Download Working Paper: DPRU WP 201503