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Wage Trends in Post-Apartheid South Africa: Constructing an Earnings Series from Household Survey Data

Author

Listed:
  • Rulof Burger
  • Derek Yu

    (Department Of Economics, Stellenbosch University)

Abstract

This paper examines South African wage earnings trends using all the available post-1994 household survey datasets. This allows us to identify and address the sources of data inconsistencies across surveys in order to construct a more comparable earnings time series. Taking account of the inconsistencies in questionnaire design and the presence of outliers, we find that it is possible to construct a fairly stable earnings series for formal sector employees. We find that claims that workers have on average experienced a substantial decrease in their real wage earnings in the post-apartheid era is based on choosing datasets on either side of Statistics South Africa’s changeover from October Household Surveys (OHS) to the more consistent Labour Force Surveys (LFS), which caused a discontinuous and inexplicably large drop in average earnings. The data actually show an increase in real wage earnings in the post-transition period for formal sector employees, and does not provide strong evidence of decreasing wages in the informal economy. The paper also investigates changes in the distribution of earnings, as well as mean earnings trends by population group, gender and skill category.

Suggested Citation

  • Rulof Burger & Derek Yu, 2007. "Wage Trends in Post-Apartheid South Africa: Constructing an Earnings Series from Household Survey Data," Working Papers 07117, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:07117
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    File URL: http://www.dpru.uct.ac.za/sites/default/files/image_tool/images/36/DPRU%20WP07-117.pdf
    File Function: First version, 2007
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    Citations

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    Cited by:

    1. Heinrich R. Bohlmann, 2012. "Reducing illegal immigration to South Africa: A dynamic CGE analysis," Working Papers 274, Economic Research Southern Africa.
    2. Nicola Branson & Martin Wittenberg, 2014. "Reweighting South African National Household Survey Data to Create a Consistent Series Over Time: A Cross-Entropy Estimation Approach," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 19-38, March.
    3. Arden Finn, 2015. "A National Minimum Wage in the Context of the South African Labour Market," SALDRU Working Papers 153, Southern Africa Labour and Development Research Unit, University of Cape Town.

    More about this item

    Keywords

    South Africa: Earnings; Wages; Labour market trends;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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