Labour Market Segmentation and Income Inequality in Regional Ghanaian Mining Sector

Abstract

This chapter presents an investigation into the theory of labour market segmentation and income inequality in the Ghanaian mining sector. Mining activity especially gold mining has been a significant component of exports as well as employment and income earning in the three major mining regions of Ghana. While income growth is an economic benefit, the high incomes associated with the mining sector may lead to greater income inequality. This chapter provides an analysis of mining activity and income inequality in the Western, Eastern, and Ashanti regions of Ghana. The application of labour market segmentation and the Gini coefficient (a measure of inequality) for personal income are found to be significantly associated with the type and levels of mining employment. However, this observation is not linear as income inequality initially increases with mining activity before decreasing at medium to high levels of mining employment, thus following a Kuznets curve pattern. Segregating datasets for indigenous and expatriate staff reveals very different patterns of income inequality. It poignantly increases with indigenous and/or local community personnel relative to expatriate technical personnel at high levels of mining employment; income inequality is lower among the local community residents relative to nationals from other regions and/or from neighbouring countries. This means segmented labour markets (SLM) within the mining industry are likely to be a problem as they result in increased income inequality among locales relative to foreign expatriates.

Citation

Kurantin, N. and Osei-Hwedie, B.Z. (2023), "Labour Market Segmentation and Income Inequality in Regional Ghanaian Mining Sector", Das, R.C. (Ed.) Inclusive Developments Through Socio-economic Indicators: New Theoretical and Empirical Insights, Emerald Publishing Limited, Leeds, pp. 231-243. https://doi.org/10.1108/978-1-80455-554-520231019