The effects of sectoral collective bargaining on wages in Senegalese firms

Abstract

The general objective of this article is to analyze the effects of collective bargaining on wages in Senegalese firms. To do so, we use dynamic panel data from 17 industries over the period 2012-2016. The wage bargaining model deduced from Layard et al.'s (1991) Wage Setting - Price Setting model was estimated using the generalized method of moments (GMM). The results of the model's estimation show that collective bargaining is a source of wage growth for companies in Senegal. These results imply decentralized collective bargaining, i.e. at company level. In other words, the decentralization of collective bargaining makes it possible to take into account the specific characteristics of the company as well as better working conditions for employees.

In terms of research prospects, the effects of wage drift, i.e. the gap between actual and contractual wages, on firm performance and youth employment would be a major contribution to economic research.

Keywords: Collective bargaining, wage, Wage negotiation model, GMM method, Senegal.

JEL Classification: J51

Paper type: Applied Research