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The Appropriate Measure of Wages for Analyzing Income, Employment, and Migration: Median, Mean, and Minimum Wages in Ghana

Published online by Cambridge University Press:  23 May 2014

William F. Steel
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Extract

Unemployment problems in urban areas of less developed countries throughout the world have stimulated increasing interest in analyzing the impact of wages on labor supply and demand and in formulating appropriate wage policies. The urban-rural wage differential is a significant variable in attempts to measure the determinants of labor supply through migration from rural areas (Beals et al., 1967; Greenwood, 1969; Knight, 1972; Rourke and Sakyi-Gyinae, 1972). The level and growth of wages relative to capital costs may influence the labor intensity of investment and production through substitution, and hence affect the rate of growth of employment (Fajama, 1973; Frank, 1971; Harris and Todaro, 1969; House, 1973; Maitha, 1973; Roemer, 1971, forthcoming; Senga, 1973). Increasing attention is being paid to inequalities and changes in the distribution of wages and income (Ewusi, 1971; House, 1975; McCabe, 1974) and to the trade-off between unemployment and wage or price inflation (Ajayi and Osayimwese, 1974). Many of these studies stress the importance for employment growth of wage restraint relative to the price of capital and relative to productivity and product price increases over time. Hence it is essential for governments under pressure both from unions and from unemployment to have an accurate measure of the level and growth of the appropriate wage when trying to make wage policy decisions.

Type
Research Article
Information
African Studies Review , Volume 19 , Issue 1 , April 1976 , pp. 17 - 30
Copyright
Copyright © African Studies Association 1976

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References

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