IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v16y2012i4p608-623.html
   My bibliography  Save this article

Estimating the Causal Effect of Enforcement on Minimum Wage Compliance: The Case of S outh A frica

Author

Listed:
  • Haroon Bhorat
  • Ravi Kanbur
  • Natasha Mayet

Abstract

This paper attempts to estimate the causal effect of government enforcement on compliance with minimum wages in South Africa, a country where considerable non-compliance exists. The number of labour inspectors per capita is used as a proxy for enforcement, whilst non-compliance is measured using an index of violation that measures both the proportion of individuals violated, as well as the average depth of individual violation. Due to the potential simultaneity between enforcement and compliance, the number of labour inspectors is instrumented by the number of non-inspectors. The results suggest that there are a variety of factors impacting on violation, including firm-level, sectoral and spatial characteristics. One of the key determinants of violation is found to be the local unemployment rate. However, the number of labour inspectors is found to be insignificant in determining non-compliance.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2012. "Estimating the Causal Effect of Enforcement on Minimum Wage Compliance: The Case of S outh A frica," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 608-623, November.
  • Handle: RePEc:bla:rdevec:v:16:y:2012:i:4:p:608-623 DOI: 10.1111/rode.2012.16.issue-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/10.1111/rode.2012.16.issue-4
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, pages 277-287.
    2. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, pages 719-736.
    3. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    4. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, pages 270-290.
    5. William Maloney & Jairo Mendez, 2004. "Measuring the Impact of Minimum Wages. Evidence from Latin America," NBER Chapters,in: Law and Employment: Lessons from Latin America and the Caribbean, pages 109-130 National Bureau of Economic Research, Inc.
    6. Lucas Ronconi, 2012. "Globalization, Domestic Institutions, and Enforcement of Labor Law: Evidence from Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 89-105, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ravi KANBUR & Lucas RONCONI & Leigh WEDENOJA, 2013. "Labour law violations in Chile," International Labour Review, International Labour Organization, pages 431-444.
    2. Mariana Viollaz, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," CEDLAS, Working Papers 0199, CEDLAS, Universidad Nacional de La Plata.
    3. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
    4. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), pages 1-27.
    5. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    6. Marek Antosiewicz & Piotr Lewandowski & Jan Witajewski-Baltvilks, 2016. "Input vs. Output Taxation—A DSGE Approach to Modelling Resource Decoupling," Sustainability, MDPI, Open Access Journal, pages 1-17.
    7. Viollaz, Mariana, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," MPRA Paper 72000, University Library of Munich, Germany.
    8. Muravyev, Alexander & Oshchepkov, Aleksey, 2013. "Minimum Wages, Unemployment and Informality: Evidence from Panel Data on Russian Regions," IZA Discussion Papers 7878, Institute for the Study of Labor (IZA).
    9. Andrés Ham, 2015. "Minimum wage violations in Honduras," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    10. Mariana Viollaz, 2016. "Are Labor Inspections Protecting Workers’ Rights? Adding the Evidence from Size-based Labor Regulations and Fines in Peru," CEDLAS, Working Papers 0205, CEDLAS, Universidad Nacional de La Plata.
    11. Haepp, Tobias & Lin, Carl, 2016. "How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital? Evidence from China," IZA Discussion Papers 10332, Institute for the Study of Labor (IZA).
    12. Karolina Goraus & Piotr Lewandowski, 2016. "Minimum Wage Violation In Central And Eastern Europe," IBS Working Papers 03/2016, Instytut Badan Strukturalnych.
    13. Haroon Bhorat, 2012. "A Nation in Search of Jobs: Six Possible Policy Suggestions for Employment Creation in South Africa," Working Papers 12150, University of Cape Town, Development Policy Research Unit.
    14. Soundararajan, Vidhya, 2014. "Minimum Wage Effects at Different Enforcement Levels: Evidence from Employment Surveys in India," Working Papers 180133, Cornell University, Department of Applied Economics and Management.
    15. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.

    More about this item

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:16:y:2012:i:4:p:608-623. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.