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The Cost of Rigidity: The Case of the South African Labor Market

  • Johannes Fedderke

The South African labor market has been characterized by high and persistent levels of unemployment, and a poor capacity to create jobs. This paper examines existing evidence on what rigidities have generated this outcome. Pricing power in output markets, as well as labor supply and demand side rigidities are all found to have contributed, resulting in excessive increases in real wage costs which under conditions of relatively low economic growth, has produced a stagnant labor market. Policy requirements are the pursuit of stonger economic growth and reductions in real labor costs.

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Paper provided by Economic Research Southern Africa in its series Working Papers with number 290.

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Length: 27 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:rza:wpaper:290
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  1. Geeta Kingdon & John Knight, 2001. "Unemployment in South Africa: the nature of the beast," Economics Series Working Papers WPS/2001-15, University of Oxford, Department of Economics.
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  4. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
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  11. Johannes Fedderke & Chandana Kularatne & Martine Mariotti, 2005. "Mark-up Pricing in South African Industry," Working Papers 01, Economic Research Southern Africa.
  12. Ingrid Woolard & Stephan Klasen, 2005. "Determinants of Income Mobility and Household Poverty Dynamics in South Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 865-897.
  13. Philippe Aghion & Johannes Fedderke & Peter Howitt & Chandana Kularatne & Nicola Viegi, 2008. "Testing Creative Destruction in an Opening Economy : the Case of the South African Manufacturing Inudstries," Documents de Travail de l'OFCE 2008-23, Observatoire Francais des Conjonctures Economiques (OFCE).
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  15. Duncan Hodge, 2009. "Growth, Employment And Unemployment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 77(4), pages 488-504, December.
  16. Taryn Dinkelman, 2004. "How Household Context Affects Search Outcomes Of The Unemployed In Kwazulu-Natal, South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 72(3), pages 484-521, 09.
  17. Duncan Hodge, 2009. "Growth, Employment and Unemployment in South Africa," Working Papers 119, Economic Research Southern Africa.
  18. Aghion, Philippe & Braun, Matias & Fedderke, Johannes, 2008. "Competition and Productivity Growth in South Africa," Scholarly Articles 3350068, Harvard University Department of Economics.
  19. Paul Cichello & Gary Fields & Murray Leibbrandt, 2003. "Earnings and Employment Dynamics for Africans in Post-apartheid South Africa: A Panel Study of KwaZulu-Natal," Working Papers 03077, University of Cape Town, Development Policy Research Unit.
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  24. Martin Wittenberg, 2002. "Job Search In South Africa: A Nonparametric Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 70(8), pages 1163-1196, December.
  25. Johannes Fedderke & Robert Klitgaard & Kamil Akramov, 2011. "Heterogeneity Happens: How Rights Matter in Economic Development," Working Papers 220, Economic Research Southern Africa.
  26. David Lam & Cally Ardington & Murray Leibbrandt, 2007. "Schooling as a Lottery: Racial Differences in School Advancement in Urban South Africa," SALDRU Working Papers 18, Southern Africa Labour and Development Research Unit, University of Cape Town.
  27. Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," World Bank Economic Review, World Bank Group, vol. 17(1), pages 27-50, June.
  28. Marina Marinkov & Jean-pierre Geldenhuys, 2007. "Cyclical Unemployment And Cyclical Output: An Estimation Of Okun'S Coefficient For South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 373-390, 09.
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