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Unemployment And Reservation Wages In Working‐Class Cape Town

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  • NICOLI NATTRASS
  • RICHARD WALKER

Abstract

Are the unemployed in South Africa ‘pricing themselves out of the labour market;’? This paper explores this proposition through an analysis of reservation wages in Cape Town's working class district of Khayelitsha/Mitchell's Plain. It argues that reservation wages are not out of line with predicted wages. This, in turn, suggests that unemployment in the area is not attributable to job seekers having unrealistically high reservation wages.

Suggested Citation

  • Nicoli Nattrass & Richard Walker, 2005. "Unemployment And Reservation Wages In Working‐Class Cape Town," South African Journal of Economics, Economic Society of South Africa, vol. 73(3), pages 498-509, September.
    • Handle: RePEc:bla:sajeco:v:73:y:2005:i:3:p:498-509
    DOI: 10.1111/j.1813-6982.2005.00034.x
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    1. Kingdon, Geeta Gandhi & Knight, John, 2004. "Unemployment in South Africa: The Nature of the Beast," World Development, Elsevier, vol. 32(3), pages 391-408, March.
    2. Richard Walker, 2003. "Reservation Wages-Measurement and Determinants: Evidence from the KMP Survey," SALDRU/CSSR Working Papers 038, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Kingdon, Geeta Gandhi & Knight, John, 2004. "Unemployment in South Africa: The Nature of the Beast," World Development, Elsevier, vol. 32(3), pages 391-408, March.
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    Cited by:

    1. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    2. Levinsohn, James & Pugatch, Todd, 2014. "Prospective analysis of a wage subsidy for Cape Town youth," Journal of Development Economics, Elsevier, vol. 108(C), pages 169-183.
    3. Neil A. Rankin & Gareth Roberts, 2011. "Youth Unemployment, Firm Size And Reservation Wages In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 79(2), pages 128-145, June.
    4. Mark Stater & Jeffrey B Wenger, 2017. "The Immediate Hardship of Unemployment: Evidence from the US Unemployment Insurance System," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(1), pages 17-36, January.
    5. Kim Engle & Cecil Mlatsheni, 2017. "The extent of churn in the South African youth labour market: Evidence from NIDS 2008-2015," SALDRU Working Papers 201, Southern Africa Labour and Development Research Unit, University of Cape Town.
    6. Hila Axelrad & Israel Luski & Miki Malul, 2017. "Reservation Wages and the Unemployment of Older Workers," Journal of Labor Research, Springer, vol. 38(2), pages 206-227, June.
    7. Vincent Dadam & Nicola Viegi, 2021. "Estimating a New Keynesian Wage Phillips Curve," Working Papers 202107, University of Pretoria, Department of Economics.
    8. Haroon Bhorat & Safia Khan, 2018. "Structural Change and Patterns of Inequality in the South African Labour Market," Working Papers 201801, University of Cape Town, Development Policy Research Unit.
    9. Nicola Viegi & Vincent Dadam, 2020. "Estimating a New Keynesian Wage Phillips Curve," Working Papers 11000, South African Reserve Bank.
    10. Mr. Christopher S Adam & Mr. Edward F Buffie, 2020. "The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence," IMF Working Papers 2020/023, International Monetary Fund.
    11. Nicoli Nattrass & Jeremy Seekings, 2018. "Employment and labour productivity in high unemployment countries," Development Policy Review, Overseas Development Institute, vol. 36(S2), pages 769-785, September.
    12. Frederick C.v.N. Fourie, 2011. "The South African unemployment debate: three worlds, three discourses?," SALDRU Working Papers 63, Southern Africa Labour and Development Research Unit, University of Cape Town.
    13. Girum Abebe & Stefano Caria & Marcel Fafchamps & Paolo Falco & Simon Franklin & Simon Quinn & Forhad Shilpi, 2017. "Matching Firms and Workers in a Field Experiment in Ethiopia," SERC Discussion Papers 0225, Centre for Economic Performance, LSE.
    14. Björn Nilsson, 2019. "The School-to-Work Transition in Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 55(5), pages 745-764, May.
    15. Jacqueline Borel-Saladin & Owen Crankshaw, 2009. "Social Polarisation or Professionalisation? Another Look at Theory and Evidence on Deindustrialisation and the Rise of the Service Sector," Urban Studies, Urban Studies Journal Limited, vol. 46(3), pages 645-664, March.
    16. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    17. Natanya Meyer, 2017. "South Africa's Youth Unemployment Dilemma: Whose Baby is it anyway?," Journal of Economics and Behavioral Studies, AMH International, vol. 9(1), pages 56-68.
    18. Magejo, Prudence & Benhura, Miracle & Mudiriza, Gibson, 2020. "Former Homeland Areas and Unemployment in South Africa: A Decomposition Approach," IZA Discussion Papers 12941, Institute of Labor Economics (IZA).
    19. Johannes Fedderke, 2012. "The Cost of Rigidity: The Case of the South African Labor Market," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(4), pages 809-842, December.

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