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Making Racial Wage Relations Fair in South Africa: A Focus on the Role of Trade Unions


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  • Sandrine Rospabé

    (School of Economics, University of Cape Town)

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    The aim of this working paper is to highlight the influence of South African trade unions on African and White earnings as well as their role in the reduction of wage inequalities and discrimination between these two groups. The econometric analysis utilises a 1997 microeconomic data set. Findings show firstly that the union wage premium for African male workers lies between 13 percent and 20 percent, depending on the methods used. This value falls in the higher "developing countries" range. In contrast, White workers do not seem to benefit from their unionisation, at least in terms of wages. Secondly, the application of the residual difference method to a non-linear model shows that the racial earnings gap, and more restrictively wage discrimination, originates mainly in the non-union sector. The results indicate that unions play an important role in reducing the white-African wage gap but that discrimination is still a complicated issue in the South African labour market policy.

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    Bibliographic Info

    Paper provided by University of Cape Town, Development Policy Research Unit in its series Working Papers with number 01048.

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    Length: 29 pages
    Date of creation: Apr 2001
    Date of revision:
    Publication status: Published in Working Paper Series by the Development Policy Research Unit, April 2001, pages 1-29
    Handle: RePEc:ctw:wpaper:01048

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    Keywords: South Africa: White-African wage gap; trade unions; earnings;

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    Cited by:
    1. Geeta Gandhi Kingdon & John Knight, 2004. "Race and the Incidence of Unemployment in South Africa," Review of Development Economics, Wiley Blackwell, vol. 8(2), pages 198-222, 05.
    2. Grün, Carola, 2003. "Essays in the Economics of Inequality," Munich Dissertations in Economics 1283, University of Munich, Department of Economics.
    3. Azam, Jean-Paul & Rospabé, Sandrine, 2005. "Trade Unions v. Statistical Discrimination: Theory and Application to Post-Apartheid South Africa," IDEI Working Papers 348, Institut d'Économie Industrielle (IDEI), Toulouse.
    4. Damian Hattingh & James Hodge & Sandrine Rospabé, 2003. "The Impact of Privatisation and Regulatory Reform on Wage Premia in State-Owned Enterprises in South Africa," Working Papers 03078, University of Cape Town, Development Policy Research Unit.


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