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Earnings and Employment Dynamics for Africans in Post-apartheid South Africa: A Panel Study of KwaZulu-Natal1

Author

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  • Paul L. Cichello
  • Gary S. Fields
  • Murray Leibbrandt

Abstract

The labour market is central in determining individual and household well-being in South Africa. Therefore, an understanding of earnings and employment dynamics is a key policy issue. However, the absence of panel data has constrained empirical work addressing these issues. This paper makes use of a regional panel data set for KwaZulu-Natal to begin the study of earnings and employment dynamics. The authors find that, on average, working-aged Africans in KwaZulu-Natal experienced large gains in earnings during the period 1993--8. These gains were progressive in nature, with the highest quintile of 1993 earners and those originally employed in the formal sector actually experiencing zero or negative growth in their average earnings. The average gain in earnings varied substantially depending on the employment transitions experienced by labour force participants. Obtaining formal sector employment is found to be an important pathway to growth in earnings, yet not exclusively so. The majority of those who get ahead do so by retaining employment in a given sector or moving into the informal sector. The dynamism of the informal sector over this period is shown to be an important contributor to the progressive growth in earnings. Government policies that seek to increase employment and earnings in the informal as well as formal sectors are recommended. Understanding the constraints preventing the vast number of unemployed from engaging in informal employment is shown to be a key issue for future work. Copyright 2005, Oxford University Press.

Suggested Citation

  • Paul L. Cichello & Gary S. Fields & Murray Leibbrandt, 2005. "Earnings and Employment Dynamics for Africans in Post-apartheid South Africa: A Panel Study of KwaZulu-Natal1," Journal of African Economies, Centre for the Study of African Economies, vol. 14(2), pages 143-190, June.
    • Handle: RePEc:oup:jafrec:v:14:y:2005:i:2:p:143-190
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    Citations

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    Cited by:

    1. Olivier Bargain & Prudence Kwenda, 2014. "The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 63(1), pages 117-153.
    2. Duval Hernández, Robert & Fields, Gary S. & Jakubson, George H., 2020. "Inequality and Panel Income Changes: Conditions for Possibilities and Impossibilities," IZA Discussion Papers 13179, Institute of Labor Economics (IZA).
    3. Paul Cichello & Hala Abou-Ali & Daniela Marotta, 2013. "What happened to real earnings in Egypt, 2008 to 2009?," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-38, December.
    4. Bargain, Olivier B. & Magejo, Prudence, 2010. "Is Informality Bad? Evidence from Brazil, Mexico and South Africa," IZA Discussion Papers 4711, Institute of Labor Economics (IZA).
    5. Finn, Arden & Leibbrandt, Murray, 2013. "Mobility and Inequality in the First Three Waves of NIDS," SALDRU Working Papers 120, Southern Africa Labour and Development Research Unit, University of Cape Town.
    6. Essers, Dennis, 2013. "South African labour market transitions during the global financial and economic crisis: Micro-level evidence from the NIDS panel and matched QLFS cross-sections," IOB Working Papers 2013.12, Universiteit Antwerpen, Institute of Development Policy (IOB).
    7. 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.
    8. Claire Vermaak, 2010. "The Impact of Multiple Imputation of Coarsened Data on Estimates on the Working Poor in South Africa," WIDER Working Paper Series wp-2010-086, World Institute for Development Economic Research (UNU-WIDER).
    9. Andrew Kerr & Martin Wittenberg & Jairo Arrow, 2014. "Job Creation and Destruction in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 1-18, March.
    10. Mattie Susan Landman & Neave O'Clery, 2020. "The impact of the Employment Equity Act on female inter-industry labour mobility and the gender wage gap in South Africa," WIDER Working Paper Series wp-2020-52, World Institute for Development Economic Research (UNU-WIDER).
    11. Ija Trapeznikova & Juan Pablo Rud, 2015. "Wage Dispersion, Job Creation and Development: Evidence from Sub-Saharan Africa," 2015 Meeting Papers 1005, Society for Economic Dynamics.
    12. Olivier Bargain & Prudence Kwenda, 2009. "The Informal Sector Wage Gap: New Evidence Using Quantile Regressions on Panel Data," CEDI Discussion Paper Series 09-06, Centre for Economic Development and Institutions(CEDI), Brunel University.
    13. Alex Sienaert, 2008. "Some Child Cost Estimates for South Africa," CSAE Working Paper Series 2008-15, Centre for the Study of African Economies, University of Oxford.
    14. Serena Merrino, 2020. "Measuring labour earnings inequality in post-apartheid South Africa," WIDER Working Paper Series wp-2020-32, World Institute for Development Economic Research (UNU-WIDER).
    15. James, Deborah, 2017. "Deductions and counter-deductions in South Africa," LSE Research Online Documents on Economics 85975, London School of Economics and Political Science, LSE Library.
    16. Claire Vermaak, 2012. "Tracking poverty with coarse data: evidence from South Africa," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(2), pages 239-265, June.
    17. Dennis Essers, 2014. "South African Labour Market Transitions During the Global Financial and Economic Crisis: Micro-Level Evidence," WIDER Working Paper Series wp-2014-115, World Institute for Development Economic Research (UNU-WIDER).
    18. 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.

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