Wages to woes: examining the relationship between real wage and conflict in Africa

This study examines the real wage on internal conflict in 20 African countries from 1990 to 2021. The analysis includes a composite internal conflict measure as well as its subcomponents, which include civil wars/coup d’état, political violence/terrorism, and civil disorder. Economic frameworks include method of moment quantile regressions, fixed-effects, and the two-step dynamic generalised method of moment. Quantile regressions decreases in the real wage across different levels of internal conflict. The findings reveal that a decrease in real wages significantly increases the risk of internal conflict, especially in countries experiencing elevated levels of conflict. Therefore, in these cases, a decline in the real wage may fan the flames of conflict. Conversely, increases in real wages do not consistently reduce conflict, except in scenarios with heightened political violence/terrorism and civil disorder. A robustness test with the use of the World Bank’s political stability and absence of violence confirms the consistency of results. This study also finds real wage decreases are more predictive of smaller-scale conflicts than severe conflicts, like civil wars.