This paper addresses the question as to why we observe such large differentials in earnings in urban African labour markets after controlling for observable human capital. We first use a three year panel across Ghana and Tanzania and find common patterns for both countries assuming that movement...

This paper addresses the questions as to the size and causes of earnings differentials in two urban African labor markets, those of Ghana and Tanzania. We have panel data so we can ask how far time invariant unobservables, market ability for short, matters in the determination of earnings. We...