The size and sources of economic rents in a developing country manufacturing labour market

The potential sources of rent to labour in a developing country urban labour market are considered in this paper. The data set used enables the relative importance of unions, firm size, profitability, ownership and firm age to be assessed on the basis of cross-section evidence. It is shown that all these factors affect earnings. A panel data based estimation of the importance of the profitability term provides strong support for a rent sharing theory of wage determination in a developing country similar to much recent evidence for developed country labour markers.