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Labour Market Reform and the Evolution of the Racial Wage Hierarchy in Post-Apartheid South Africa

  • Paul Allanson
  • Jonathan Atkins


    (University of Dundee)

The central theme of this working paper is the way that the racial wage hierarchy evolved in South Africa over the period 1993 to 1999 amongst full-time regular employees of normal working age, but excluding those in the primary sector and the defence forces. We find that the transition to democratic rule in 1994 was accompanied by an improvement in the wage position of the majority African workforce relative to all other racial groups, but that these gains were not fully preserved through the latter half of the decade. The persistence of racial wage differences following the repeal of all overt discriminatory laws and regulations points to the need for concerted policy interventions to reverse the legacy of apartheid. We review the range of policy initiatives that have been taken by the South African Government since 1994 in the light of our empirical findings.

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Paper provided by University of Cape Town, Development Policy Research Unit in its series Working Papers with number 01059.

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Length: 19 pages
Date of creation: Dec 2001
Date of revision:
Publication status: Published in Working Paper Series by the Development Policy Research Unit, December 2001, pages 1-19
Handle: RePEc:ctw:wpaper:01059
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  1. Leung, Siu Fai & Yu, Shihti, 1996. "On the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 197-229.
  2. Deolalikar, A.B. & Evenson, R.E., 1988. "Technology Production And Technology Purchase In Indian Industry: An Econometric Analysis," Papers 556, Yale - Economic Growth Center.
  3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  4. F. S. Barker, 1999. "On South African Labour Policies," South African Journal of Economics, Economic Society of South Africa, vol. 67(1), pages 1-14, 03.
  5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  6. Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
  7. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  8. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  9. 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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