ABSTRACT

The institutional intervention elevating wages in the urban economy could, of course, only occur in the formal sector of such economies. Our review of the evidence in all five countries brings out two points. First, the formal urban wage level has experienced a long-term decline, with the possible exception of Cote d’Ivoire (for which conclusive evidence either way is unavailable) — in some cases a precipitous one. Thus formal urban sector wages have not in any country shown a downward rigidity, even though, in most cases, it is the high rate of inflation which has been the mechanism which brought about the real wage decline. On this point, the evidence of the country case studies fully substantiate the finding drawn from statistics for a large number of countries reported by international agencies, and analyzed in Part II.