Wages and Human Capital in Exporting Firms in Morocco

Wages and Human Capital in Exporting Firms in Morocco

Published Jan 2006

Authors

C. Muller, C. Nordman

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On-the-job training may be a way of promoting the wages of low and medium wage workers

This paper studies the relationship between wages, human capital accumulation and work organisation in Morocco using matched worker-firm data for Metallurgical-electrical and Textile-clothing firms.

While wages are found to rise with all human capital characteristics, returns to education and experience are much higher for the upper wages. Participation in on-the-job training is constrained by:

  • a relevant industrial location
  • minimal educational background
  • an appropriate family situation

Moreover, work organisation and on-the-job training are dependent on the education process. Finally, we find strong interactions of human capital accumulation with involvement in chain gangs, team work and supervision.

The results indicate that there may be some opportunity of using on-the-job training (OJT) to promote the wages of low and medium wage workers. OJT is also interesting because it can allow firms to quickly adapt to the new international competition, notably with China on European textile markets following the admission of this country in the WTO and the removal of the MFA quotas.

The elicited relationship between the considered work characteristics supports that there may be room for joint monitoring and joint policies addressing these distinct dimensions of the Moroccan labour markets. Such an approach could be concretised through training policies accounting for firm types characterised by specific organisational constraints, and for worker types in terms of human capital, and socio-demographic characteristics.

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