IDEAS home Printed from https://ideas.repec.org/p/ctw/wpaper/11145.html
   My bibliography  Save this paper

Estimating the Causal Effect of Enforcement on Minimum Wage Compliance : The Case of South Africa

Author

Listed:
  • Haroon Bhorat
  • Ravi Kanbur
  • Natasha Mayet

    (Development Policy Research Unit
    Director and Professor)

Abstract

This paper attempts to estimate the causal effect of government enforcement on compliance with minimum wages in South Africa, a country where considerable non-compliance exists. The number of labour inspectors per capita is used as a proxy for enforcement, whilst non-compliance is measured using an index of violation that measures both the proportion of individuals violated, as well as the average depth of individual violation. Due to the potential simultaneity between enforcement and compliance, the number of labour inspectors is instrumented by the number of non-inspectors. The results suggest that there are a variety of factors impacting on violation, including firm-level, sectoral and spatial characteristics. One of the key determinants of violation is found to be the local unemployment rate. However, the number of labour inspectors is found to be insignificant in determining non-compliance.

Suggested Citation

  • Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2011. "Estimating the Causal Effect of Enforcement on Minimum Wage Compliance : The Case of South Africa," Working Papers 11145, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:11145
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/11427/7291
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
    2. Steven D. Levitt, 2002. "Using Electoral Cycles in Police Hiring to Estimate the Effects of Police on Crime: Reply," American Economic Review, American Economic Association, vol. 92(4), pages 1244-1250, September.
    3. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
    4. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    5. William Maloney & Jairo Mendez, 2004. "Measuring the Impact of Minimum Wages. Evidence from Latin America," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 109-130, National Bureau of Economic Research, Inc.
    6. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    7. Lucas Ronconi, 2012. "Globalization, Domestic Institutions, and Enforcement of Labor Law: Evidence from Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 89-105, January.
    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. Andrés Ham, 2015. "Minimum wage violations in Honduras," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    2. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    3. Ravi KANBUR & Lucas RONCONI, 2018. "Enforcement matters: The effective regulation of labour," International Labour Review, International Labour Organization, vol. 157(3), pages 331-356, September.
    4. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
    5. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "A Note on Measuring the Depth of Minimum Wage Violation," LABOUR, CEIS, vol. 27(2), pages 192-197, June.
    6. Haroo Bhorat & Ravi Kanbur & Benjamin Stanwix, 2019. "Compliance with labor laws in developing countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-80, June.
    7. Bhorat, Haroon & Kanbur, Ravi & Mayet, Natasha, 2011. "The Determinants Of Minimum Wage Violation In South Africa," Working Papers 126535, Cornell University, Department of Applied Economics and Management.
    8. Sabina Dewan & Lucas Ronconi, 2018. "U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(1), pages 35-56, January.
    9. Ravi KANBUR & Lucas RONCONI & Leigh WEDENOJA, 2013. "Labour law violations in Chile," International Labour Review, International Labour Organization, vol. 152(3-4), pages 431-444, December.
    10. Sabina Dewan & Lucas Ronconi, 2014. "U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America," IDB Publications (Working Papers) 87253, Inter-American Development Bank.
    11. Tom Kirchmaier & Stephen Machin & Matteo Sandi & Robert Witt, 2020. "Prices, Policing and Policy: The Dynamics of Crime Booms and Busts," Journal of the European Economic Association, European Economic Association, vol. 18(2), pages 1040-1077.
    12. Viollaz, Mariana, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," MPRA Paper 72000, University Library of Munich, Germany.
    13. William S. Reece, 2010. "Casinos, Hotels, And Crime," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 145-161, April.
    14. Vollaard, Ben & Koning, Pierre, 2009. "The effect of police on crime, disorder and victim precaution. Evidence from a Dutch victimization survey," International Review of Law and Economics, Elsevier, vol. 29(4), pages 336-348, December.
    15. Stephen Machin & Olivier Marie, 2011. "Crime And Police Resources: The Street Crime Initiative," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 678-701, August.
    16. Philip A. Curry & Anindya Sen & George Orlov, 2016. "Crime, apprehension and clearance rates: Panel data evidence from Canadian provinces," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 481-514, May.
    17. Andrea Garnero, 2018. "The dog that barks doesn’t bite: coverage and compliance of sectoral minimum wages in Italy," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-24, December.
    18. Paolo Buonanno & Giovanni Mastrobuoni, 2012. "Police and Crime: Evidence from Dictated Delays in Centralized Police Hiring," Carlo Alberto Notebooks 244, Collegio Carlo Alberto.
    19. Steven D. Levitt, 2004. "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 163-190, Winter.
    20. Klick, Jonathan & Tabarrok, Alexander, 2005. "Using Terror Alert Levels to Estimate the Effect of Police on Crime," Journal of Law and Economics, University of Chicago Press, vol. 48(1), pages 267-279, April.

    More about this item

    Keywords

    Minimum Wage; Enforcement; Compliance; Depth of Violation; South Africa;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ctw:wpaper:11145. 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: Waseema Petersen (email available below). General contact details of provider: https://edirc.repec.org/data/dpuctza.html .

    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.