The labour market effects of globalization in Kenya

Abstract

Since the 1980s, Kenya has been gradually integrating with the global economy. Using both industry-level and firm-level data, the paper examines the effects of globalization on employment and earnings in the Kenyan manufacturing sector. The industry-level analysis suggests that the overall effect of international trade on manufacturing employment has been negative in the 1990s. The firm-level analysis indicates that less skilled workers experienced losses in earnings, and that the inequality in earnings between skilled and unskilled workers increased during this period. This suggests that globalization has been associated with adverse labour market outcomes in Kenya. Copyright © 2004 John Wiley & Sons, Ltd