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.