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Wage trends in post-apartheid South Africa: Constructing an earnings series from household survey data

Author

Listed:
  • Rulof Burger

    (Department of Economics, Stellenbosch University)

  • Derek Yu

    (Department of Economics, Stellenbosch University)

Abstract

This paper examines South African wage earnings trends using all the available post-1994 household survey datasets. This allows us to identify and address the sources of data inconsistencies across surveys in order to construct a more comparable earnings time series. Taking account of the inconsistencies in questionnaire design and the presence of outliers, we find that it is possible to construct a fairly stable earnings series for formal sector employees. We find that claims that workers have on average experienced a substantial decrease in their real wage earnings in the post-apartheid era is based on choosing datasets on either side of Statistics South Africa’s changeover from October Household Surveys (OHS) to the more consistent Labour Force Surveys (LFS), which caused a discontinuous and inexplicably large drop in average earnings. The data actually show an increase in real wage earnings in the post-transition period for formal sector employees, and does not appear to provide strong evidence of decreasing wages in the informal economy. The paper also investigates the change in the distribution of earnings, as well as mean earnings trends by population group, gender and skill category.

Suggested Citation

  • Rulof Burger & Derek Yu, 2006. "Wage trends in post-apartheid South Africa: Constructing an earnings series from household survey data," Working Papers 10/2006, Stellenbosch University, Department of Economics.
    • Handle: RePEc:sza:wpaper:wpapers24
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    File URL: https://www.ekon.sun.ac.za/wpapers/2006/wp102006/wp-10-2006.pdf
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    Cited by:

    1. Neil Rankin & Rulof Burger & Friedrich Kreuser, 2015. "The elasticity of substitution and labour-displacing technical change in post-apartheid South Africa," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    2. Darma Mahadea, 2012. "Prospects Of Entrepreneurship To The Challenge Of Job Creation In South Africa," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 17(04), pages 1-17.
    3. Dieter von Fintel, 2016. "Wage flexibility in a high unemployment regime: spatial heterogeneity and the size of local labour markets," Working Papers 09/2016, Stellenbosch University, Department of Economics.
    4. Nicola Branson, 2009. "Re-weighting the OHS and LFS National household Survey Data to create a consistent series over time: A Cross Entropy Estimation Approach," SALDRU Working Papers 38, Southern Africa Labour and Development Research Unit, University of Cape Town.
    5. Rulof P. Burger & Francis J. Teal, 2015. "The Effect of Schooling on Worker Productivity: Evidence from a South African Industry Panel," Journal of African Economies, Centre for the Study of African Economies, vol. 24(5), pages 629-644.
    6. Rulof Burger & Rachel Jafta & Dieter von Fintel, 2016. "Affirmative action policies and the evolution of post-apartheid South Africa's racial wage gap," WIDER Working Paper Series wp-2016-66, World Institute for Development Economic Research (UNU-WIDER).
    7. Stu Woolman & Michael Bishop, 2007. "Down on the farm and barefoot in the kitchen: farm labour and domestic labour as forms of servitude," Development Southern Africa, Taylor & Francis Journals, vol. 24(4), pages 595-606.
    8. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    9. Carlos Gradín, 2021. "Occupational Gender Segregation in Post-Apartheid South Africa," Feminist Economics, Taylor & Francis Journals, vol. 27(3), pages 102-133, July.
    10. Arden Finn, 2015. "A National Minimum Wage in the Context of the South African Labour Market," SALDRU Working Papers 153, Southern Africa Labour and Development Research Unit, University of Cape Town.
    11. Derek Yu, 2008. "The South African labour market: 1995 – 2006," Working Papers 05/2008, Stellenbosch University, Department of Economics.
    12. Heinrich R. Bohlmann, 2012. "Reducing illegal immigration to South Africa: A dynamic CGE analysis," Working Papers 274, Economic Research Southern Africa.
    13. Rulof Burger & Rachel Jafta & Dieter von Fintel, 2016. "Affirmative action policies and the evolution of post-apartheid South Africa's racial wage gap," WIDER Working Paper Series 066, World Institute for Development Economic Research (UNU-WIDER).
    14. Serena Merrino, 2020. "Measuring labour earnings inequality in post-apartheid South Africa," WIDER Working Paper Series wp-2020-32, World Institute for Development Economic Research (UNU-WIDER).
    15. Derek Yu, 2007. "The comparability of the Statistics South Africa October Household Surveys and Labour Force Surveys," Working Papers 17/2007, Stellenbosch University, Department of Economics.
    16. Friedrich Kreuser & Rulof Burger & Neil Rankin, 2015. "The elasticity of substitution and labour-displacing technical change in post-apartheid South Africa," WIDER Working Paper Series wp-2015-101, World Institute for Development Economic Research (UNU-WIDER).
    17. Hassan Essop & Derek Yu, 2008. "The South African informal sector (1997 – 2006)," Working Papers 03/2008, Stellenbosch University, Department of Economics.
    18. Nicola Branson & Martin Wittenberg, 2014. "Reweighting South African National Household Survey Data to Create a Consistent Series Over Time: A Cross-Entropy Estimation Approach," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 19-38, March.
    19. Charles Meth, 2007. "Sticking to the Facts: Official and Unofficial Stories about Poverty and Unemployment in South Africa," Working Papers 07123, University of Cape Town, Development Policy Research Unit.
    20. Haroon Bhorat & Sumayya Goga, 2012. "The Gender Wage Gap in the Post-apartheid South African Labour Market," Working Papers 12148, University of Cape Town, Development Policy Research Unit.
    21. Amina Ebrahim & Kezia Lilenstein, 2019. "Gender and the South African labour market: Policy relevant research possibilities using South African tax data," WIDER Working Paper Series wp-2019-31, World Institute for Development Economic Research (UNU-WIDER).
    22. Paula Armstrong & Janca Steenkamp, 2008. "South African Trade Unions: an Overview for 1995 to 2005," Working Papers 10/2008, Stellenbosch University, Department of Economics.
    23. Carlos Gradín, 2018. "Occupational gender segregation in post-apartheid South Africa," WIDER Working Paper Series 53, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    South Africa; Earnings; Wages; Labour market trends;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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