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Trade unions vs. statistical discrimination: Theory and application to post-apartheid South Africa

  • Azam, Jean-Paul
  • Rospabe, Sandrine

A simple model of statistical discrimination is analyzed, which captures some stylized facts of the South African labor market. It shows that this type of discrimination disappears when the wage rates are determined by efficient bargaining between a representative firm and a union, with endogenous membership. This may explain why the wage gap between Black and White workers in post-apartheid South Africa is smaller among unionized workers than among non-unionized ones.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 84 (2007)
Issue (Month): 1 (September)
Pages: 417-444

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Handle: RePEc:eee:deveco:v:84:y:2007:i:1:p:417-444
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  3. Butcher, Kristin F. & Rouse, Cecilia Elena, 2001. "Wage effects of unions and industrial councils in South Africa," Policy Research Working Paper Series 2520, The World Bank.
  4. Mwabu, Germano & Schultz, T Paul, 2000. "Wage Premiums for Education and Location of South African Workers, by Gender and Race," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 307-34, January.
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  8. Thomas, Duncan, 1996. "Education across Generations in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 330-34, May.
  9. Paul Frijters, 1998. "Hiring on the basis of expected productivity in a South African clothing firm," Discussion Papers Series 441, School of Economics, University of Queensland, Australia.
  10. Wintrobe,Ronald, 2000. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521794497, November.
  11. Deolalikar, A.B. & Evenson, R.E., 1988. "Technology Production And Technology Purchase In Indian Industry: An Econometric Analysis," Papers 556, Yale - Economic Growth Center.
  12. Alison L. Booth, 1985. "The Free Rider Problem and a Social Custom Model of Trade Union Membership," The Quarterly Journal of Economics, Oxford University Press, vol. 100(1), pages 253-261.
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  14. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  15. Myles, G.D. & Naylor, R.A., 1990. "Do Union Reduce Discrimination? A Model Of Nash Bargaining Between A Union And An Employeur With Discriminatory Tastes," The Warwick Economics Research Paper Series (TWERPS) 366, University of Warwick, Department of Economics.
  16. Paul Allanson & Jonathan Atkins & Timothy Hinks, 1999. "A Multilateral Decomposition of Racial Wage Differentials in the 1994 South African Labour Market," Dundee Discussion Papers in Economics 099, Economic Studies, University of Dundee.
  17. Van Reenen, John, 1994. "The Creation and Capture of Rents: Wages and Innovation in a Panel of UK Companies," CEPR Discussion Papers 1071, C.E.P.R. Discussion Papers.
  18. Booth, Alison L & Chatterji, Monojit, 1995. "Union Membership and Wage Bargaining When Membership is Not Compulsory," Economic Journal, Royal Economic Society, vol. 105(429), pages 345-60, March.
  19. Dennis J. Aigner & Glen G. Cain, 1977. "Statistical Theories of Discrimination in Labor Markets," ILR Review, Cornell University, ILR School, vol. 30(2), pages 175-187, January.
  20. David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1992. "Wages, Profits and Rent-Sharing," NBER Working Papers 4222, National Bureau of Economic Research, Inc.
  21. 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.
  22. Oettinger, Gerald S, 1996. "Statistical Discrimination and the Early Career Evolution of the Black-White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 52-78, January.
  23. Booth, Alison L, 1984. "A Public Choice Model of Trade Union Behaviour and Membership," Economic Journal, Royal Economic Society, vol. 94(376), pages 883-98, December.
  24. Robin Naylor, 1989. "Strikes, Free Riders, and Social Customs," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 771-785.
  25. Knight, J B & McGrath, M D, 1977. "An Analysis of Racial Wage Discrimination in South Africa," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 39(4), pages 245-71, November.
  26. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, November.
  27. Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
  28. Timothy Hinks & Duncan Watson, 2001. "A multinomial logit nondiscriminatory approach to estimating racial wage and occupational discrimination," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 605-612.
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