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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:A Comparison of Ghanaian Civil Servants' Earnings before and After Retrenchment
Authors:Alderman, Harold
Canagarajah, Sudharshan
Younger, Stephen
Periodical:Journal of African Economies
Geographic term:Ghana
Subjects:household income
civil servants
Politics and Government
Economics and Trade
Labor and Employment
Abstract:As a contribution to the understanding of the welfare implications of public sector retrenchment, this paper presents an 'ex post' evaluation of the earnings of former civil servants in Ghana before and after their lay-off. The study is based on a survey of 506 former civil service employees conducted between May 1991 and January 1992. Earnings functions for the current period are compared with earnings functions for the time the individuals were in the civil service, with controls for selection into current employment. The returns to human capital are found not to differ before and after retrenchment. Earnings simply shift down, and the amount of that shift depends only on the redeployee's location before redeployment and the sector in which he or she currently works. Average earnings for those redeployees currently working fell by 48 percent of earnings at the time of employment in the civil service. That number falls to 27 percent if an income stream equal to 10 percent of severance pay per year is added to current earnings. Those individuals who have found wage employment - 20 percent of those currently employed - had a much smaller reduction of earnings. The estimates indicate that their income in terms of earnings plus return on severance pay actually increased. Bibliogr., notes, ref., sum.