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Trade liberalisation and labour demand within South African manufacturing firms

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  • Lawrence Edwards
  • Alberto Behar

Abstract

Using new detailed tariff data, wages disaggregated by skill level and firm level information, this paper ascertains the relationships between trade, technology and labour demand and investigates the effects of tariff changes on factor prices in South African manufacturing. We find evidence that trade liberalization and technological change have affected the skill structure of employment. Export orientation, raw materials imports, training, investment in computers and firm age are positively associated with the skill intensity of production. We also find that tariff liberalisation raised the return to capital relative to labour, but that the negative impact on labour is concentrated on semi-skilled workers. Tariff liberalisation mandated a rise in real returns to unskilled workers.

Suggested Citation

  • Lawrence Edwards & Alberto Behar, 2005. "Trade liberalisation and labour demand within South African manufacturing firms," Working Papers 06, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:06
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    File URL: http://www.econrsa.org/node/31
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    Cited by:

    1. Fiandeiro, M. Fatima & Rankin, Neil A., 2008. "Trade liberalisation and wages in South African manufacturing," MPRA Paper 17066, University Library of Munich, Germany.
    2. Haroon Bhorat & Ravi Kanbur, 2005. "Poverty and Well-being in Post-Apartheid South Africa: An Overview of Data, Outcomes and Policy," Working Papers 05101, University of Cape Town, Development Policy Research Unit.
    3. Rattsø, Jørn & Stokke, Hildegunn, 2009. "Wage inequality, comparative advantage and skill biased technical change in South Africa," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 34, Verein für Socialpolitik, Research Committee Development Economics.
    4. Burns, Justine & Edwards, Lawrence & Pauw, Karl, 2010. "Wage subsidies to combat unemployment and poverty," IFPRI discussion papers 969, International Food Policy Research Institute (IFPRI).
    5. J. Paul Dunne & Lawrence Edwards, 2006. "Trade Technology and Employment: A case Study of South Africa," Working Papers 0602, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    6. Marianne Matthee & Neil Rankin & Tasha Naughtin & Carli Bezuidenhout, 2016. "The South African manufacturing exporter story," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).
    7. Ben Salha, Ousama, 2013. "Does economic globalization affect the level and volatility of labor demand by skill? New insights from the Tunisian manufacturing industries," Economic Systems, Elsevier, vol. 37(4), pages 572-597.

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