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Trade Liberalisation and Labour Demand within South African Manufacturing Firms

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  • L Edwards
  • A Behar

Abstract

Using new detailed tariff data, wages disaggregated by skill level and firm level information, this paper ascertains the relationships between trade, technology and labour demand and investigates the effects of tariff changes on factor prices in South African manufacturing. We find evidence that trade liberalization and technological change have affected the skill structure of employment. Export orientation, raw materials imports, training, investment in computers and firm age are positively associated with the skill intensity of production. We also find that tariff liberalisation raised the return to capital relative to labour, but that the negative impact on labour is concentrated on semiskilled workers. Tariff liberalisation mandated a rise in real returns to unskilled workers.

Suggested Citation

  • L Edwards & A Behar, 2006. "Trade Liberalisation and Labour Demand within South African Manufacturing Firms," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 30(2), pages 127-146, August.
    • Handle: RePEc:taf:rseexx:v:30:y:2006:i:2:p:127-146
    DOI: 10.1080/10800379.2006.12106411
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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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