Wages and Labor Management in African Manufacturing

a b s t r a c t Using matched employer-employee data from ten African countries, we exam-ine the relationship between wages, worker supervision, and labor productiv-ity in manufacturing. Wages increase with firm size for both production workers and supervisors. We develop a two-tier model of supervision that can account for this stylized fact and we fit the structural model to the data. We find a strong effect of both supervision and wages on effort and hence on labor productivity. Labor management in sub-Saharan Africa appears prob-lematic, with much higher supervisor-to-worker ratios than elsewhere and a higher elasticity of effort with respect to supervision than in Morocco. I