IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v48y2020i4d10.1007_s11293-020-09684-0.html
   My bibliography  Save this article

Aggregate Public-Private Remuneration Patterns in South Africa

Author

Listed:
  • Andreas Wörgötter

    (University of Technology)

  • Sihle Nomdebevana

    (South African Reserve Bank)

Abstract

This paper investigates the public-private remuneration patterns in South Africa with time-series methods for the first time since the introduction of an inflation-targeting framework in 2000. Co-integration tests and analysis confirm that there is a stable, long-run relationship between nominal and real remuneration in the public and private sector. The adjustment to the deviations from this long-run relationship is strong and significant for public-sector remuneration, while private-sector wages neither respond to deviations from the long-run relationship nor lagged changes in public-sector remuneration. The causal direction from private- to public-sector remuneration does not change if real earnings are calculated with the gross domestic product deflator. This is confirmed by simple Granger-causality tests.

Suggested Citation

  • Andreas Wörgötter & Sihle Nomdebevana, 2020. "Aggregate Public-Private Remuneration Patterns in South Africa," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 461-474, December.
    • Handle: RePEc:kap:atlecj:v:48:y:2020:i:4:d:10.1007_s11293-020-09684-0
    DOI: 10.1007/s11293-020-09684-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11293-020-09684-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11293-020-09684-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gervan Fearon, 2004. "Public sector wage settlement and the threat of outsourcing," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(3), pages 161-174, September.
    2. Gaetano D’Adamo, 2014. "Wage spillovers across sectors in Eastern Europe," Empirical Economics, Springer, vol. 47(2), pages 523-552, September.
    3. J. Lindquist & Roger Vilhelmsson, 2006. "Is the Swedish central government a wage leader?," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1617-1625.
    4. Afonso, António & Gomes, Pedro, 2014. "Interactions between private and public sector wages," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 97-112.
    5. Cindy Biesenbeek & Siemen Werff, 2019. "Public–Private Wage Differentials: Evidence from The Netherlands," De Economist, Springer, vol. 167(1), pages 23-43, March.
    6. Ana Lamo & Javier J. Pérez & Ludger Schuknecht, 2012. "Public or Private Sector Wage Leadership? An International Perspective," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 228-244, March.
    7. James Alm & Abel Embaye, 2010. "Explaining The Growth Of Government Spending In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(2), pages 152-169, June.
    8. Fabrizio Coricelli & Alex Cukierman & Alberto Dalmazzo, 2006. "Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 39-63, March.
    9. Robert C. Marshall & Antonio Merlo, 2004. "Pattern Bargaining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 239-255, February.
    10. Odhiambo, Nicholas M., 2009. "Electricity consumption and economic growth in South Africa: A trivariate causality test," Energy Economics, Elsevier, vol. 31(5), pages 635-640, September.
    11. Calmfors, Lars & Larsson, Anna, 2009. "Pattern Bargaining and Wage Leadership in a Small Open Economy," Seminar Papers 760, Stockholm University, Institute for International Economic Studies.
    12. Cooley, Thomas F. & Leroy, Stephen F., 1985. "Atheoretical macroeconometrics: A critique," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 283-308, November.
    13. Wolfgang Pollan, 2004. "Zur Frage der Lohnführerschaft in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 77(3), pages 197-211, March.
    14. Odhiambo, Nicholas M., 2009. "Savings and economic growth in South Africa: A multivariate causality test," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 708-718, September.
    15. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    16. Juselius, Katarina, 2006. "The Cointegrated VAR Model: Methodology and Applications," OUP Catalogue, Oxford University Press, number 9780199285679.
    17. Kostas Mavromaras & Stephane Mahuteau & Kostas Mavromaras & Sue Richardson & Rong Zhu, 2017. "Public–Private Sector Wage Differentials in Australia," The Economic Record, The Economic Society of Australia, vol. 93, pages 105-121, June.
    18. Paul Ramskogler, 2012. "Is there a European wage leader? Wage spillovers in the European Monetary Union," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(4), pages 941-962.
    19. Sonia A. Agudelo & Hector Sala, 2016. "Wage setting in the Colombian manufacturing industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(1), pages 99-134, January.
    20. Alberto Coco & Nicola Viegi, 2019. "The monetary policy of the South African Reserve Bank: stance, communication and credibility," Working Papers 788, Economic Research Southern Africa.
    21. Markus Knell & Alfred Stiglbauer, 2012. "Reference Norms, Staggered Wages, And Wage Leadership: Theoretical Implications And Empirical Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 569-592, May.
    22. Lars Calmfors & Anna Larsson Seim, 2013. "Pattern Bargaining and Wage Leadership in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 109-140, January.
    23. Wolfgang Pollan, 2004. "Pattern Bargaining and Wage Leadership in Austria," Austrian Economic Quarterly, WIFO, vol. 9(2), pages 88-101, June.
    24. Rudiger Ahrend & Donato de Rosa & William Tompson, 2007. "Russian Manufacturing and the Threat of ‘Dutch Disease': A Comparison of Competitiveness Developments in Russian and Ukrainian Industry," OECD Economics Department Working Papers 540, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas Wrgtter & Sihle Nomdebevana, 2019. "Aggregate and sectoral publicprivate remuneration patterns in South Africa," Working Papers 9382, South African Reserve Bank.
    2. Camarero, Mariam & D'Adamo, Gaetano & Tamarit, Cecilio, 2014. "Wage leadership models: A country-by-country analysis of the EMU," Economic Modelling, Elsevier, vol. 44(S1), pages 2-11.
    3. Marit Gjelsvik & Ragnar Nymoen & Victoria Sparrman, 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics," Econometrics, MDPI, vol. 8(3), pages 1-15, July.
    4. Javier J. Perez & Ana Lamo & Enrique Moral-Benito, 2015. "Does Slack Influence Public and Private Labor Market," EcoMod2015 8792, EcoMod.
    5. Gaetano D’Adamo, 2014. "Wage spillovers across sectors in Eastern Europe," Empirical Economics, Springer, vol. 47(2), pages 523-552, September.
    6. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 325-350, September.
    7. Adam, Antonis, 2020. "Under economic adjustment programs, do private sector wages respond to changes in public wages and employment?," Journal of Policy Modeling, Elsevier, vol. 42(6), pages 1334-1351.
    8. Javier J. Pérez & Marie Aouriri & Maria M. Campos & Dmitrij Celov & Domenico Depalo & Evangelia Papapetrou & Jurga Pesliakaite & Roberto Ramos Magdaleno & Marta Rodríguez-Vives, 2016. "The fiscal and macroeconomic effects of government wages and employment reform," Occasional Papers 1607, Banco de España.
    9. Peter Dolton & Arno Hantzsche, 2024. "Follow the leader? The long‐run interaction between public and private sector wage growth in the UK," Economica, London School of Economics and Political Science, vol. 91(363), pages 837-879, July.
    10. John D. Levendis, 2018. "Time Series Econometrics," Springer Texts in Business and Economics, Springer, number 978-3-319-98282-3, April.
    11. Goran Vukšić, 2012. "Sectoral wage dynamics and intersectoral linkages in the context of export competitiveness: the case of Croatia," wiiw Balkan Observatory Working Papers 99, The Vienna Institute for International Economic Studies, wiiw.
    12. M. Ivanova., 2015. "The Interaction between Public and Private Sector Wages," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
    13. Kronick, Jeremy, 2015. "Do Loan-to-Value Ratio Regulation Changes Affect Canadian Mortgage Credit?," MPRA Paper 73671, University Library of Munich, Germany.
    14. Eduardo Garzón Espinosa & Bibiana Medialdea García & Esteban Cruz Hidalgo, 2021. "Fiscal Policy Approaches: An Inquiring Look From The Modern Monetary Theory," Journal of Economic Issues, Taylor & Francis Journals, vol. 55(4), pages 999-1022, October.
    15. Kühl, Michael, 2007. "Cointegration in the foreign exchange market and market efficiency since the introduction of the Euro: Evidence based on bivariate cointegration analyses," University of Göttingen Working Papers in Economics 68, University of Goettingen, Department of Economics.
    16. Grau, Aaron Stephan Alexander & Hockmann, Heinrich, 2017. "Estimating oligopsony power on two vertically integrated markets," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261277, European Association of Agricultural Economists.
    17. Geweke, J. & Joel Horowitz & Pesaran, M.H., 2006. "Econometrics: A Bird’s Eye View," Cambridge Working Papers in Economics 0655, Faculty of Economics, University of Cambridge.
    18. Joscha Beckmann & Robert Czudaj, 2017. "Effective Exchange Rates, Current Accounts and Global Imbalances," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 500-533, August.
    19. Signe Rosenberg, 2015. "The Impact of a Change in Real Estate Value on Private Consumption in Estonia," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 7(2).
    20. Mariam Camarero & Gaetano D’Adamo & Cecilio Tamarit, 2014. "The role of Institutions in explaining wage determination in the Euro Area: a panel cointegration approach," Working Papers 2014/15, Economics Department, Universitat Jaume I, Castellón (Spain).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:48:y:2020:i:4:d:10.1007_s11293-020-09684-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.