Institute for Development Studies, University of Nairobi

Using data from the Kenya Ministry of Finance and Planning's Central Bureau of Statistics, the structure of employment and wages in 4-2 industries in the Kenya manufacturing sector is considered. This includes a description of the structure and an empirical test of several hypotheses which seek to explain the determinants of the existing structure. In addition, the interaction between changes in the wage structure and changes in employment are considered. The available evidence indicates considerable dispersion among industries in wages paid, especially for skilled employees. These differences in wages paid are explained rather successfully by the hypotheses tested, namely relative differences among industries in their respective abilities to pay wages above the supply price of labour, the extent and nature of skilled labour required and such institutional factors as industry differences in the proportion of the labour force employed in Nairobi and in Government enterprises. These measures were more effective in explaining the structure of wages for skilled employees than for the unskilled.