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Offshoring within South African manufacturing firms: An analysis of the labour market effects

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  • Anmar Pretorius
  • Carli Bezuidenhout
  • Marianne Matthee
  • Derick Blaauw

Abstract

South Africa's manufacturing sector experiences declining growth and labour demand, and increased imports of intermediate goods. The paper investigates the influence of offshoring on employment and wages for capital‐ and labour‐intensive industries and skilled and unskilled workers, using firm‐ and employer–employee‐level data. Unlike findings in developed countries, offshoring generally lowers employment in manufacturing firms and increases and decreases the percentage of unskilled workers and lower skilled workers, respectively. Increased narrow offshoring seemingly grows the cohort of unskilled workers, particularly in ultra‐labour‐intensive industries. As offshoring gains momentum, worker‐level earnings increase in capital‐ and labour‐intensive industries but decrease in ultra‐labour‐intensive industries.

Suggested Citation

  • Anmar Pretorius & Carli Bezuidenhout & Marianne Matthee & Derick Blaauw, 2022. "Offshoring within South African manufacturing firms: An analysis of the labour market effects," South African Journal of Economics, Economic Society of South Africa, vol. 90(2), pages 123-148, June.
    • Handle: RePEc:bla:sajeco:v:90:y:2022:i:2:p:123-148
    DOI: 10.1111/saje.12315
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    References listed on IDEAS

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