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The elasticity of substitution and labour-displacing technical change in post-apartheid South Africa

Author

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  • Friedrich Kreuser
  • Rulof Burger
  • Neil Rankin

Abstract

This paper uses normalized constant elasticity of substitution production functions to estimate the elasticity of substitution and labour-augmenting technical change in South Africa over the period 1994-2012. We find elasticities of 0.6-0.9 and positive labour-augmenting technical change, which results in an increase in capital's income share relative to labour. More broadly, we find total factor productivity (TFP) growth rates of between 1 and 2 per cent across industries, although we find no TFP growth in the mining sector.

Suggested Citation

  • 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).
    • Handle: RePEc:unu:wpaper:wp-2015-101
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    References listed on IDEAS

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    Cited by:

    1. Konstantin Makrelov & Rob Davies & Laurence Harris, 2021. "The impact of capital flow reversal shocks in South Africa: a stock- and-flow-consistent analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 35(3-4), pages 475-501, July.
    2. Merven, Bruno & Hartley, Faaiqa & Arndt, Channing, 2019. "Quantifying the Macro- and Socio-Economic Benefits of a Transition to Renewable Energy in South Africa," Conference papers 333091, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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