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Labour markets for irrigated agriculture in central Ethiopia: Wage premiums and segmentation

Author

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  • Mengistu Assefa Wendimu

    (Danish Institute for International Studies (DIIS), Natural Resources and Development
    Department of Food and Resource Economics, University of Copenhagen)

  • Peter Gibbon

    (Danish Institute for International Studies (DIIS))

Abstract

Labour market segmentation in developing countries has been considered in a growing literature, some of which suggests an informal sector wage premium. However, such studies have mainly focused on urban labour markets and have not discriminated between the informally self-employed and wage workers. This paper examines segmentation in rural markets for agricultural wage workers in Ethiopia, controlling for location, farming systems and observed worker characteristics. Applying an endogenous switching model with simultaneous estimation of wage equations it establishes an informal sector wage premium, self-selection into the informal sector and sectorally-distinct wage determination mechanisms.

Suggested Citation

  • Mengistu Assefa Wendimu & Peter Gibbon, 2014. "Labour markets for irrigated agriculture in central Ethiopia: Wage premiums and segmentation," IFRO Working Paper 2014/06, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:wpaper:2014_06
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    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2014/IFRO_WP_2014_06.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wendimu, Mengistu Assefa & Henningsen, Arne & Gibbon, Peter, 2016. "Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor?," World Development, Elsevier, vol. 83(C), pages 84-97.

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    More about this item

    Keywords

    Labour market segmentation; Agricultural labour markets; Wage premiums; Large-scale agriculture; Ethiopia;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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