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Hiring on the Basis of Expected Productivity in a South African Clothing Firm

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  • Frijters, Paul

Abstract

Using information from the personnel files of a South African clothing firm, the author explores the in- and outflow of weekly-paid workers. These employees form a separate labor market within the company. Data was available concerning both the productivity of current workers, and the characteristics of rejected applicants and fired workers. This makes it possible to identify the characteristics which are screened out at entry and the characteristics that influence productivity. This allows for an empirical analysis of discrimination at job-entry. Hiring decisions were found to be consistent with expected productivity. The observed screening out of African workers at job entry could be explained by statistical discrimination, i.e., the actual productivity of African workers in this firm was found to be significantly lower than the productivity of workers of other ethnic backgrounds. The effect of education on productivity was found to be very small. Copyright 1999 by Royal Economic Society.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 51 (1999)
Issue (Month): 2 (April)
Pages: 345-54

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Handle: RePEc:oup:oxecpp:v:51:y:1999:i:2:p:345-54

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  1. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 881-919, November.
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Cited by:
  1. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
  2. Frijters, Paul & Shields, Michael A. & Theodoropoulos, Nikolaos & Wheatley Price, Stephen, 2003. "Testing for Employee Discrimination Using Matched Employer-Employee Data: Theory and Evidence," IZA Discussion Papers 807, Institute for the Study of Labor (IZA).
  3. Azam, Jean-Paul & Rospabe, Sandrine, 2007. "Trade unions vs. statistical discrimination: Theory and application to post-apartheid South Africa," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 417-444, September.
  4. Yukichi Mano & Takashi Yamano & Aya Suzuki & Tomoya Matsumoto, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets:Evidence from the Cut Flower Industry in Ethiopia," GRIPS Discussion Papers, National Graduate Institute for Policy Studies 10-29, National Graduate Institute for Policy Studies.
  5. Antoninis, Manos, 2006. "The wage effects from the use of personal contacts as hiring channels," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 59(1), pages 133-146, January.

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