ABSTRACT
Senegal’s economy has been characterized by long-term stagnation and, in terms of many indicators, even decline. The modern industrial labor market is heavily regulated by the government. The regulations may be aimed at advancing workers’ welfare, but it is questionable whether they are having this effect; instead, these regulations have resulted in higher production costs and reduced flexibility of industrial enterprises. Low worker effort, motivation, and discipline are cited by managers as major causes for the low labor productivity of Senegal’s major industries. The econometric findings-that effective protection has a negative effect on enterprise productivity and no effect on wages-are strong and precise. The effect that deteriorating economic conditions is having on the size of workers’ extended families suggests that the burdens of rising unemployment and limited hiring of young workers are being borne mostly by the older industrial workers.
