Labor Market Segmentation and Wages in West Africa

ABSTRACT This study analyzes the wage costs of labor market segmentation (LMS) in the private sector in eight West African countries. The article aims to first analyze the private sector's labor market by identifying its segments and their effects on wage formation and second, to compare the labor market structures of the studied countries. Using finite mixture models (FMMs), the study determined the number of segments in each country in 2018 and 2021. Our findings indicate that the LMS hypothesis in the private sector holds for all countries that share similarities in segment functioning. We also noticed that the dominant segments, except for a few countries, do not value high education.