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The General Equilibrium Effects of a Productivity Increase on the Economy and Gender in South Africa

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  • Godbertha Kinyondo

    ()
    (Department of Economics, University of Pretoria)

  • Margaret Mabugu

    ()
    (Department of Economics, University of Pretoria)

Abstract

This study utilises a computable general equilibrium (CGE) model to examine the effects of economy-wide (SIM 1) and partial (SIM 2) productivity increases on the economy, gender employment, wages, income and welfare in South Africa. The model has 49 sectors, 14 household categories, and 2 primary inputs. SIM 1 results in ‘output’ led employment demand and increased earnings for all skill types of men and women. Skilled men benefits more than others in most sectors. Under SIM 2, productivity has negative employment impact of all skills mostly in labour-intensive sectors. Some displaced labour relocates to expanded export-orientation and service sectors resulting in increased economy-wide jobs and earnings. Unskilled women earnings, however, decline because they are concentrated in low-paying positions. In addition, productivity improves household’s welfare due to reduced commodity prices and improved earnings.

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Bibliographic Info

Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200801.

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Length: 23 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:pre:wpaper:200801

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Keywords: CGE; FDI; South Africa; Gender; Productivity;

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  1. Klein, Michael & Aaron, Carl & Hadjimichael, Bita, 2001. "Foreign direct investment and poverty reduction," Policy Research Working Paper Series 2613, The World Bank.
  2. Hildegunn Ekroll Stokke & Jørn Rattsø & Xinshen Diao, 2001. "International spillovers, productivity growth and openness in Thailand: An intertemporal general equilibrium analysis," Working Paper Series 2202, Department of Economics, Norwegian University of Science and Technology.
  3. L Edwards, 2001. "Globalisation And The Skills Bias Of Occupational Employment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 69(1), pages 40-71, 03.
  4. Yih-Chyi Chuang & Chi-Mei Lin, 1999. "Foreign direct investment, R&D and spillover efficiency: Evidence from Taiwan's manufacturing firms," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 117-137.
  5. Diao, Xinshen & Rattsø, Jørn & Stokke, Hildegunn Ekroll, 2002. "International spillovers, productivity growth and openness in Thailand," TMD discussion papers 89, International Food Policy Research Institute (IFPRI).
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