Skill, race, and wage inequality in British Tanganyika

Abstract

High racial disparities between Europeans and Africans and high skill premiums are recurrent themes in the literature on inequality in colonial Africa. However, their determinants and effects on inequality remain underexplored. This paper investigates wage inequality, skill premiums, and racial discrimination in British Tanganyika from c. 1920 to 1960. It provides first estimates for wage inequality and race premiums in Tanganyika and extends the coverage of earlier skill premium estimates. Initially, wage inequality in Tanganyika was comparable to neighbouring Kenya and Uganda, but it remained higher in the late colonial period. A primary driver of wage inequality was racial wage disparity, which was partly caused by racial discrimination. Skill premiums also played an important and increasing role and were higher than previously thought. The Tanganyikan administration’s failure to expand African education to meet skilled labour demand significantly contributed to racial income differences and wage inequality within the African labour force.

Explorations in Economic History