ABSTRACT
This chapter utilizes individual worker data from the 17-firm sample to explain wage differentials in terms of productivity-related and other characteristics of individuals. Earnings differentials are enormous between the non-African and African groups: After controlling for differences in education, experience, gender, and other explanatory variables, non-Africans are on average found to earn from 123 percent to 142 percent more than Africans. Earnings differentials are enormous between the non-African and African groups: After controlling for differences in education, experience, gender, and other explanatory variables, non-Africans are on average found to earn from 123 percent to 142 percent more than Africans. Profitability and output growth are frequently hypothesized to have a positive effect on wages because they reflect the firm’s ability to pay. The differential between non-Africans and Africans does not increase when total compensation is considered.
