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The General Equilibrium Effects of a Productivity Increase on the Economy and Gender in South Africa

Author

Listed:
  • Godbertha Kinyondo

    (Department of Economics, University of Pretoria)

  • Margaret Mabugu

    (Department of Economics, University of Pretoria)

Abstract

This study utilises a computable general equilibrium (CGE) model to examine the effects of economy-wide (SIM 1) and partial (SIM 2) productivity increases on the economy, gender employment, wages, income and welfare in South Africa. The model has 49 sectors, 14 household categories, and 2 primary inputs. SIM 1 results in ‘output’ led employment demand and increased earnings for all skill types of men and women. Skilled men benefits more than others in most sectors. Under SIM 2, productivity has negative employment impact of all skills mostly in labour-intensive sectors. Some displaced labour relocates to expanded export-orientation and service sectors resulting in increased economy-wide jobs and earnings. Unskilled women earnings, however, decline because they are concentrated in low-paying positions. In addition, productivity improves household’s welfare due to reduced commodity prices and improved earnings.

Suggested Citation

  • Godbertha Kinyondo & Margaret Mabugu, 2008. "The General Equilibrium Effects of a Productivity Increase on the Economy and Gender in South Africa," Working Papers 200801, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:200801
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    References listed on IDEAS

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    More about this item

    Keywords

    CGE; FDI; South Africa; Gender; Productivity;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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