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The persistence of apartheid regional wage disparities in South Africa
[Long-run effects of forced resettlement: evidence from Apartheid South Africa]

Author

Listed:
  • Gibson Mudiriza
  • Lawrence Edwards

Abstract

In this article, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities in South Africa is an outcome of economic forces such as market access. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for an augmented NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find, even after controlling for NEG and other region-specific characteristics, a persistent wage deficit in the former homelands, where under apartheid black South Africans were forcefully relocated according to their ethnic groups. Average wages of workers in homelands remained approximately 17% lower than predicted between 1996 and 2011, despite the reintegration of these regions into South Africa and the implementation of regional policies after the end of apartheid.

Suggested Citation

  • Gibson Mudiriza & Lawrence Edwards, 2021. "The persistence of apartheid regional wage disparities in South Africa [Long-run effects of forced resettlement: evidence from Apartheid South Africa]," Journal of Economic Geography, Oxford University Press, vol. 21(6), pages 807-839.
    • Handle: RePEc:oup:jecgeo:v:21:y:2021:i:6:p:807-839.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbaa036
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    Cited by:

    1. Bastos, Paulo & Bottan, Nicolas, 2023. "Resource rents, coercion, and local development: Evidence from post-apartheid South Africa," World Development, Elsevier, vol. 169(C).

    More about this item

    Keywords

    Economic geography; labour market; wage differentials; regional economic activity;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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