Urban Bias and Labor Market Inequality: Trends in a Sub-Saharan Setting

Sarah Giroux, Cornell University

This paper examines the sources and trends in labor market inequality stemming from rural parentage. While these differences are often attributed to variation in levels of human capital versus differences in returns to human capital, this paper attempts to empirically assess the importance of each factor and to examine how the relative contributions of each change over time within both the formal and informal labor markets. The paper advances previous studies in two ways: Conceptually, it recognizes the concurrent influences of both levels and returns to human capital. Methodologically, it examines these inequalities in historical perspective, applies fixed-effects methods to control for the possible influence of unobserved features of families, and decomposes inequality in labor market access to that which is due to variation in levels of human capital versus that which is due to differences in returns to human capital. Findings show a convergence in the occupational attainment prospects of rural and urban children over time.