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Revisiting Informal Employment And Segmentation In The South African Labour Market

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  • James Heintz
  • Dorrit Posel

Abstract

This study revisits the definition of informal employment, and it investigates the puzzle of high open unemployment co-existing with relatively limited informal employment in South Africa. We estimate earnings equations using data from the September 2004 Labour Force Survey and present evidence of persistent earnings differentials not only between formal and informal employment, but also between types of informal employment. These persistent earnings differentials are suggestive of complex segmentation in the South African labour market and challenge the presentation of informal employment as an undifferentiated residual with no barriers to entry or mobility. Copyright (c) 2008 The Authors. Journal compilation (c) Economic Society of South Africa 2008.

Suggested Citation

  • James Heintz & Dorrit Posel, 2008. "Revisiting Informal Employment And Segmentation In The South African Labour Market," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 26-44, March.
  • Handle: RePEc:bla:sajeco:v:76:y:2008:i:1:p:26-44
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    Cited by:

    1. Essers, Dennis, 2013. "South African labour market transitions during the global financial and economic crisis: Micro-level evidence from the NIDS panel and matched QLFS cross-sections," IOB Working Papers 2013.12, Universiteit Antwerpen, Institute of Development Policy (IOB).
    2. Gabrielle, Wills, 2009. "South Africa’s Informal Economy: A Statistical Profile," MPRA Paper 52909, University Library of Munich, Germany.
    3. Neil A. Rankin & Gareth Roberts, 2011. "Youth Unemployment, Firm Size And Reservation Wages In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 79(2), pages 128-145, June.
    4. Haroon Bhorat & Kezia Lilenstein & Morné Oosthuizen & Amy Thornton, 2016. "Vulnerability In Employment: Evidence from South Africa," Working Papers 201604, University of Cape Town, Development Policy Research Unit.
    5. Aalia Cassim & Kezia Lilenstein & Morné Oosthuizen & Francois Steenkamp, 2016. "Informality and Inclusive Growth in Sub-Saharan Africa," Working Papers 201602, University of Cape Town, Development Policy Research Unit.
    6. Hong Zuo, 2013. "Formal and Informal Employment in China: Probability of Employment and Determinants of Monthly Wages," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 405-423, December.
    7. Egbert, Henrik & Fischer, Gundula & Bredl, Sebastian, 2009. "Advertisements or friends? Formal and informal recruitment methods in Tanzania," Discussion Papers 46, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    8. Alton, Theresa & Arndt, Channing & Davies, Rob & Hartley, Faaiqa & Makrelov, Konstantin & Thurlow, James & Ubogu, Dumebi, 2012. "The Economic Implications of Introducing Carbon Taxes in South Africa," WIDER Working Paper Series 046, World Institute for Development Economic Research (UNU-WIDER).

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