THE INFLUENCE OF WAGE INEQUALITY ON TRADE IN SERVICES IN SUB-SAHARAN AFRICA

Abstract: The aim of this research is to analyze empirically the influence of wage inequality on international trade in services in Sub-Saharan Africa (SSA). This work uses a methodology based on data from the World Bank's World Data Indicator and the United Nations Industrial Development Organization (UNIDO), on the one hand, and panel data modelling using Ordinary Least Squares (OLS) and Generalized Moment Methods (GMM), on the other. The results obtained show that trade in services in SSA contributes to economic diversification in this region, notably with the supply of tourism, financial, information and communication technology and personnel services. However, wage inequality has a negative impact on trade in services in Sub-Saharan Africa, and consequently reduces trade in services in this part of the world. Economic policies in Sub-Saharan Africa should therefore be geared towards improving people's purchasing power. What's more, public authorities need to strengthen the enforcement of labor laws, improve working conditions and the business environment, and combat discriminatory practices in the workplace.