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Trade Unions v. Statistical Discrimination: Theory and Application to Post-Apartheid South Africa

  • Azam, Jean-Paul
  • Rospabé, 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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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 348.

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Date of creation: Apr 2005
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Publication status: Published in Journal of Development Economics, vol. 84, n. 1, September 2007, p. 417-444.
Handle: RePEc:ide:wpaper:4374
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  1. 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.
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  24. 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.
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