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Micro-evidence on day labourers and the thickness of labour markets in South Africa

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  • PF Blaauw
  • WF Krugell

Abstract

The South African labour market is characterised by sharp segmentation, high unemployment and apparently limited informal sector employment. Recent work has focussed on the importance of the quality of education while others have argued that the rigidity of the labour market constrains employment growth. This paper considers the spatial aspects of the day labour market and argues that the size and proximity of economic activity found in agglomerations ensure a thick labour market that allows for better matching between workers and jobs. The results indicate that the day labourers, who were hired by the same employer more often, receive higher earnings and the thicker metropolitan labour market allows workers to become more specialised and receive higher earnings.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 282.

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Length: 21 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:rza:wpaper:282

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Keywords: Day labourers; Labour market; Agglomeration;

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  1. H Garretsen & M. Schramm & S. Brakman, 2003. "The Strategic Bombing of German Cities during World War II and its Impact for Germany," Working Papers 03-08, Utrecht School of Economics.
  2. Geeta Gandhi Kingdon & John Knight, 2006. "How flexible are wages in response to local unemployment in South Africa?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(3), pages 471-495, April.
  3. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  4. repec:cup:cbooks:9780521801386 is not listed on IDEAS
  5. Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September.
  6. Geeta Kingdon & John Knight, 2001. "Unemployment in South Africa: the nature of the beast," Economics Series Working Papers WPS/2001-15, University of Oxford, Department of Economics.
  7. Andre Hofmeyr, 2010. "Social Networks And Ethnic Niches: An Econometric Analysis Of The Manufacturing Sector In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(1), pages 107-130, 03.
  8. repec:cup:cbooks:9780521805247 is not listed on IDEAS
  9. Jeremy R. Magruder, 2012. "High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 138-66, July.
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