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Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa

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  • Alberto Behar

Abstract

Commentators claim that a shortage of skills in South Africa is constraining output and that a rise in skill supply would benefit less skilled occupations. This assumes or implies skilled and unskilled labour are complements. Hicks Elasticities of Complementarity and elasticities of factor price are estimated between capital and five occupations. The results show that skilled/artisanal and unskilled labour are complements while semi-skilled and unskilled labour are substitutes. These results allow for imperfectly elastic product demand, rigid wages and inference on highly non-linear elasticities. Aggregated estimates suggest More skilled labour complements Less skilled labour.
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Suggested Citation

  • Alberto Behar, 2008. "Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa," ERSA Working Paper Series 073, Economic Research Southern Africa.
  • Handle: RePEc:rza:ersawp:073
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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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