IDEAS home Printed from https://ideas.repec.org/a/bla/sajeco/v80y2012i3p400-414.html
   My bibliography  Save this article

Institutional Wage Effects: Revisiting Union And Bargaining Council Wage Premia In South Africa

Author

Listed:
  • HAROON BHORAT
  • SUMAYYA GOGA
  • CARLENE VAN DER WESTHUIZEN

Abstract

The literature on the union wage gap in South Africa is extensive, spanning a range of datasets and methodologies. There is however little consensus on the appropriate method to correct for the endogeneity of union membership or the size of the union wage gap. Furthermore, there are very few studies on the bargaining council wage premium in South Africa due to lack of data on coverage of employees under these agreements. Our study, using 2005 Labour Force Survey data, firstly reconsiders the union wage gap controlling for both firm-level and job characteristics. When correcting for endogeniety of union status through a two-stage selection model and including firm size, type of employment, and non-wage benefits, we find a much lower union wage premium for African workers in the formal sector than premia reported in some previous studies. Secondly, our study estimates bargaining council wage premia for the private and public sectors. We find that extension procedures are present in both private and public bargaining council systems, but that unions negotiate for additional gains for their members at the plant-level. Furthermore, there is some evidence that unions negotiate for awards for their members in the private sector, irrespective of bargaining council coverage.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Haroon Bhorat & Sumayya Goga & Carlene Van Der Westhuizen, 2012. "Institutional Wage Effects: Revisiting Union And Bargaining Council Wage Premia In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 80(3), pages 400-414, September.
  • Handle: RePEc:bla:sajeco:v:80:y:2012:i:3:p:400-414 DOI: j.1813-6982.2011.01306.x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1813-6982.2011.01306.x
    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. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    2. T. Paul Schultz & Germano Mwabu, 1998. "Labor Unions and the Distribution of Wages and Employment in South Africa," ILR Review, Cornell University, ILR School, vol. 51(4), pages 680-703, July.
    3. Richard B. Freeman, 2007. "Labor Market Institutions Around the World," NBER Working Papers 13242, National Bureau of Economic Research, Inc.
    4. Daniela Casale & Dorrit Posel, 2011. "Unions and the Gender Wage Gap in South Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(1), pages 27-59, January.
    5. Alex Bryson, 2007. "The Effect of Trade Unions on Wages," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 33-45.
    6. Kristin F. Butcher & Cecilia Elena Rouse, 2001. "Wage Effects of Unions and Industrial Councils in South Africa," ILR Review, Cornell University, ILR School, vol. 54(2), pages 349-374, January.
    7. Shane Godfrey & Johann Maree & Jan Theron, 2006. "Conditions of Employment and Small Business: Coverage, Compliance and Exemptions," Working Papers 06106, University of Cape Town, Development Policy Research Unit.
    8. P. G. Moll, 1993. "Black South African Unions: Relative Wage Effects in International Perspective," ILR Review, Cornell University, ILR School, vol. 46(2), pages 245-261, January.
    9. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    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. Dieter von Fintel, 2016. "Wage flexibility in a high unemployment regime: spatial heterogeneity and the size of local labour markets," Working Papers 09/2016, Stellenbosch University, Department of Economics.
    2. Dieter von Fintel, 2016. "Institutional wage-setting, labour demand and labour supply: causal estimates from a South African pseudo-panel," Working Papers 07/2016, Stellenbosch University, Department of Economics.
    3. Deon Filmer & Louise Fox, 2014. "Youth Employment in Sub-Saharan Africa
      [L’emploi des jeunes en Afrique subsaharienne - Rapport complet]
      ," World Bank Publications, The World Bank, number 16608.
    4. Miracle Ntuli & Prudence Kwenda, 2013. "Labour Unions and Wage Inequality Among African Men in South Africa," Working Papers 13159, University of Cape Town, Development Policy Research Unit.
    5. Haroon Bhorat & Natasha Mayet, 2012. "Employment Outcomes and Returns to Earnings in Post-Apartheid South Africa," Working Papers 12152, University of Cape Town, Development Policy Research Unit.
    6. Haroon Bhorat & Karmen Naidoo & Derek Yu, 2014. "Trade Unions In An Emerging Economy: The Case Of South Africa," Working Papers 201402, University of Cape Town, Development Policy Research Unit.
    7. 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.

    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:sajeco:v:80:y:2012:i:3:p:400-414. 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://edirc.repec.org/data/essaaea.html .

    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.