Teal (2011) cites recent evidence showing that segmentation is common in African labour markets, particularly between firms of different sizes. Söderbom et al. (2002) show that when observable and unobservable aspects of human capital are controlled for, wages are much higher in larger firms. Kingdon et al. (2006) conclude that non-competitive theories
such as efficiency wages and bargaining models explain this effect better than human capitaltheory. In the formal manufacturing sector, Fox and Oviedo (2008) show that wage premia do
not reflect productivity differences.