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On Kin Groups and Wages in the Ghanaian Labour Market
Author(s) -
Collier Paul,
Garg Ashish
Publication year - 1999
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.00122
Subject(s) - wage , next of kin , economics , kin selection , set (abstract data type) , labour economics , scale (ratio) , human capital , demographic economics , business , market economy , sociology , political science , physics , quantum mechanics , anthropology , computer science , law , programming language
A common feature of African societies is that individuals belong to kin groups which impose reciprocal obligations upon their members. In the modern economy, where large scale production is required, forms must employ multiple kin groups. In such cases kin groups will try to favour their own members in the assignment of good jobs. We analyze the effects of kin group patronage in the modern sector. We set out a model in which kin group favouritism is shown to give rise to a wage premium for the largest kin group. We then use an unusually rich data set from Ghana to test for kin group favouritism, empirically distinguishing it from ‘taste for discrimination’. We find that in the private sector there is no evidence for kin group patronage and earning functions (corrected for selection into the various sectors) reveal that workers are paid according to their human capital attributes. By contrast, public sector workers are rewarded for their credentials and membership of the right kin group, not for their productive characteristics. The kin group premium is about 25 percent and is statistically robust to alternative specifications.