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An Operational Guide to The Estimation Of The Economic Opportunity Cost Of Labour In South Africa

Author

Listed:
  • Hasan Ali Biçak

    (Rauf Dentas University, North Cyprus.)

  • Glenn P. Jenkins

    (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)

  • Chun-Yan Kuo

    (Department of Economics, Queen's University, Kingston, Ontario K7L 3N6, Canada)

  • M Benjamin Mphahlele

    (Limpopo Economic Development Agency, Limpopo Province, South Africa.)

Abstract

IN MOST COUNTRIES THE GOAL OF JOB creation is of paramount political importance. From an economic perspective, however, the benefit of job creation by a project is measured by the amount that the wage bill exceeds the economic opportunity cost of the labour employed. Unlike the economic opportunity cost of capital and the economic cost of foreign exchange, no single national parameter can be estimated for the economic opportunity cost of labour (EOCL). The EOCL varies by occupation, by skill level, by working environment, by labour market condition, and by region. The objective of this paper is to develop a framework with examples that will serve as a guide for the estimation of the EOCLs across a range of circumstances typical of South Africa.

Suggested Citation

  • Hasan Ali Biçak & Glenn P. Jenkins & Chun-Yan Kuo & M Benjamin Mphahlele, 2004. "An Operational Guide to The Estimation Of The Economic Opportunity Cost Of Labour In South Africa," Development Discussion Papers 2004-08, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:5516
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    Citations

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    Cited by:

    1. Glenn P. Jenkins & Pejman Bahramain & Mikhail Miklyaev, 2019. "Estimation of the Economic Opportunity Cost of Labor: An Operational Guide for Mozambique," Development Discussion Papers 2019-04, JDI Executive Programs.
    2. Mourao, Paulo Reis, 2018. "What is China seeking from Africa? An analysis of the economic and political determinants of Chinese Outward Foreign Direct Investment based on Stochastic Frontier Models," China Economic Review, Elsevier, vol. 48(C), pages 258-268.
    3. Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 12 (The Economic Opportunity Cost of Labor)," Development Discussion Papers 2011-12, JDI Executive Programs.
    4. Glenn P. Jenkins & Richard Sogah & Abdallah Othman & Mikhail Miklyaev & Çağay Coşkuner, 2023. "Estimation of the Economic Opportunity Cost of Labour: An Operational Guide for Ghana," Sustainability, MDPI, vol. 15(14), pages 1-21, July.

    More about this item

    Keywords

    :Economic Opportunity Cost; Labour; South Africa;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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