The lack of compliance amongst employers with minimum wage legislation is a problem faced by many developing countries. South Africa is no exception, informal evidence suggesting that a large proportion of the employed in the country earn wages below the stipulated minima. This dissertation attempts to measure non-compliance or, in other words, 'violation' of employers in South Africa of minimum wage legislation, and to investigate the determinants of this violation. This study constitutes the first attempt to measure enforcement and compliance in South Africa. In order to measure the strength of government enforcement of minimum wages in South Africa, the number of labour inspectors is used as a proxy measure, while employer noncompliance, or violation, is measured using an approach developed by Kanbur (2007), referred to here as the 'Kanbur Index of Violation'. Derived from the Foster-Greer-Thorbecke (1984) poverty measures, this index is used to measure the share of violated workers receiving sub-minimum wages, as well as the depth of violation, namely, the average gap between the stipulated minima and the actual wage paid. This is the first attempt in the literature on minimum wage enforcement to use the methodology proposed by Kanbur (2007) for the measurement of violation. The estimates obtained for South Africa show that the sectors where violation is most prevalent include the Security, Taxi and Farming sectors. A multivariate analysis is employed, using standard OLS, probit, and quantile regression techniques to investigate the determinants of the probability of a worker being violated by their non-compliant employer, as well as of the depth and extent of the violation, that is, the shortfall of their wage from the minimum. Another innovation of this paper, in addition to the use of the Kanbur index as a measure of violation, is the introduction of a number of spatial/density variables, such as the log of workers per square kilometre, the density of labour inspectors in a District Council, and the unemployment density in the area. The construction of these variables was made possible by mapping the statutory minima, which are location specific, to the geographic units in the Labour Force Survey data for South Africa. The principal findings of this analysis are that violation is an outcome of a range of 8 variables, including individual, firm-level/contractual, sectoral, as well as spatial/density characteristics. A key marker of the probability of minimum wage violation and the depth of violation is the density of labour inspectors in the District Council where the worker is employed. Firm-specific characteristics such as firm size also play a leading role. The results from this dissertation carry important policy implications for minimum wage legislators in South Africa, especially regarding interventions around the enforcement of sectoral minima.

Includes abstract. Includes bibliographical references.

Includes abstract. / Includes bibliographical references. / In an attempt to provide much-needed finance for road investments, the government’s national road agency has introduced numerous toll roads over the last three decades. It is currently in the process of introducing open road tolling on a network of Gauteng’s highways. Economic theory provides a rich understanding for pricing road use, particularly with regard to the pricing of externalities. By quantifying these externalities for the South African case, this paper reveals evidence of gross mispricing for road use. Specifically, the magnitude of road freight trucks’ external costs indicates that there is an absolute underpricing of road use for these vehicles. On the grounds of the externalities considered in this paper, passenger cars should, in fact, face a toll negligible in comparison to heavy vehicles. That they do not points to massive cross-subsidisation and that the relative price between light and heavy vehicles should be revisited. Appropriate pricing will improve economic efficiency by reducing cross-subsidisation. It will also rationalise the choice of freight modalities in South Africa, with the likely effect that a greater volume of goods will be carried by rail. Despite the welfare gains that the policy offers, one must be cognisant of the distortions that optimal road pricing may have.

More than a decade after the end of apartheid, inequality along racial lines is widely apparent. While the greatest disparity exists between Whites and non-Whites, inequality also persists among non-Whites. With reference to the youth of the Western Cape, Coloureds have higher per capita household income, more educated parents, superior schooling inputs and improved performance on achievement tests in comparison to Africans. The finding that Coloureds have only a slightly higher matriculation rate and a statistically equivalent enrolment rate leads one to ask whether the races face different influences on their process of educational attainment. Using individual and household data from the Cape Area Panel Study (CAPS), matriculation and enrolment (conditional on matriculation) are modeled for Africans and Coloureds separately.

Better feedback principles for the utility bills in South Africa need to be developed. Utility providers might be able to "nudge" consumers towards more desirable consumption patterns by delivering simpler and better feedback informed by applied behavioural sciences. Two sets of controlled experiments were conducted with over 1,500 subjects to identify bill design strategies that could overcome two major barriers to effective consumption feedback: • the complexity of the utility bill, especially with regards to tariff calculations, and • consumer's declining mindfulness of utility consumption between billing moments. The "Utility Bill Redesign" experiment, using a randomised control trial, investigates how improving billing feedback design increases consumer's understanding of energy usage and costs. More than 1,300 participants are randomly assigned to different treatment groups and receive one of nine redesigned utility bills or the current standard bill. Thereafter, participant's understanding of the bill they received is tested through a questionnaire. We find that restructuring the bill in a logical order and displaying the amount of electricity consumed in each tariff block with separate bar graphs is a successful way to increase consumer understanding of the bill, especially with regards to the step tariff. Further, the results clearly show that consumers are unable to make sense of a utility bill that is not in their home language, even when adding utility specific symbols. We conclude that significant low-cost improvements can be made to utility bills to increase consumer comprehension. In the "Attention Redirection" experiment, participants are assigned to different treatment groups and are given an online task that requires daily attention and effort in order to maximise pay-offs. We find that daily SMS reminders significantly redirect attention to the daily task. A blank graph, given to participants at the beginning of the experiment to assist them in self-managing their behaviour, has no effect on task adherence. The results illustrate how inattention routinely leads to sub-optimal behaviour in a specific task area and the resulting welfare loss. A purely bill-based strategy is rendered unsuccessful.

Includes bibliographical references. / This paper examines the impact of military expenditure on economic growth on a large balanced panel, using an exogenous growth model and dynamic panel data methods for 104 countries over the period 1988-2010. The prime objective of the paper is to consider the possibility of non-linearity, group heterogeneity and endogeneity within the sample. Having estimated and appraised a full sample, it is stratified based upon a range of potentially relevant factors; different levels of income, conflict experience, natural resource abundance, openness and aid. Following the stratification process, a set of instrumental variables are taken for military spending. Using 2SLS and a dynamic Generalized Method of Moments (GMM) method, the sample is regressed to identify for military expenditure.

While poor financial circumstances have been associated with an increased likelihood of depression, the role of personal debt in determining individual mental health is not fully understood. This paper investigates the existence of a causal relationship between individual debt and depression across 5 waves of panel data from the National Income Dynamics Study (NIDS). This paper adds to the existing literature on the relationship between consumer debt and mental health. The paper (i) explores the causal relationship between debt and mental health, (ii) conducts research between debt and mental health in a non-western economy, and (iii) considers the effect of various categories of debt on mental health e.g. mortgage debt, student debt, formal debt and informal debt. By using logistic fixed effects analysis, and exploiting the panel, the analysis controls for unobserved heterogeneity in the causal relationship between debt and depression. The paper finds that (I) Individuals who acquire informal debt in the current period have an increase in the odds of being depressed in both the current and future period. On the other hand, individuals who exhibit evidence of depressive symptoms in the current period have an increase in the odds of acquiring debt in the current period – but past period depressive symptoms do not appear to predict future period informal debt. Therefore, informal debt appears to exhibit characteristics of a bi-directional causal relationship in the current period, with informal debt associated with long term depressive symptoms. (II) Individuals with secure or mortgage debt exhibit a decrease in the odds of being depressed in the future, and (III) There is evidence that an individual who aquires formal debt and already depressed in the current period has a decrease in the odds of exhibiting symptoms of depression in the future period. This means that for unproductive debt categories debt appears to exhibit a negative effect on mental health and thus a decrease in lifetime utility. However, for productive debt categories such as secure debt, there is a positive effect on future mental health which may be argued to be an improvement in lifetime utility.

Price-setting behaviour plays an important role in the transmission mechanism of monetary policy as pricing decisions of firms in the private sector determine how changes in the official rate affect prices. Several recent studies using micro price data have highlighted the importance of the variation in firm characteristics on pricing decisions. This study investigates whether firms adjust their prices in response to higher interest rates and whether this response differs for firms that have credit. We estimate multinomial logistic regression models using highly disaggregated panel data on monthly product prices of 131 retail outlets in Lesotho over the period 2002-2009. In general, our results suggest that firms are more likely to adjust their prices in response to an interest rate shock. Firms will either revise their prices upwards or downwards compared to keeping their prices constant. This ambiguity occurs when a firm's price is a function of price elasticity of demand and costs. A firm has to balance the need to pass on increased cost of the higher interest cost onto prices against the demand-side sensitivity to price increases. On the contrary, when comparing firms with credit to those without, our findings show that firms with credit are more likely to keep their prices constant than to revise them. Furthermore, the study finds asymmetric results in the direction of the price adjustments. Prices are more likely to increase or decrease in the presence of both a demand and a cost shock, whereas prices are more likely to remain constant in the presence of a cost shock only. No evidence was found that credit owing firms pass the higher cost of credit onto their prices, suggesting that firms with credit finance have access to cheaper financing options than firms without credit.

Includes bibliographical references (leaves 93-102). / The aim of the dissertation is to give an overview of some of the most relevant and popular methods suggested for estimating potential output and the output gap. Three alternative methodologies - the Hodrick-Prescott filter, the production function approach and the SVAR approach - are compared and assessed empirically with respect to data representing the economic development of Uruguay in the last twenty years. Given the recent growth slowdown and abrupt recovery of Uruguay's GOP, the objective is to provide evidence on whether such changes are principally a cyclical shortfall or instead represent a structural shift towards a new growth path. Once the output gaps are estimated, their capacity as indicators of inflationary pressures is assessed through a basic gap model in which the change in inflation is related to the output gap, the money supply and the terms of trade.

Household debt measures provide vital information regarding society's financial wellbeing. This paper uses a comparative static analysis approach to evaluate total and consumer debt at the household level using two waves of NIDS data relating to the periods 2008 and 2012. The descriptive analysis is based on the share of income servicing debt by various household characteristics while the econometric analysis models the determinants of debt servicing at the household level. The descriptive statistics illustrates the financial vulnerable position of low income households as they spend a proportionally larger share of household income on debt payments and their main sources of credit are from retailers, hire purchase agreements and loan sharks. The OLS and Median Quantile regression results for 2008 and 2012 under total debt analysis indicate a dampening of the negative effect for female, Black, Coloured, no schooling and primary schooling variables; a strengthening of the positive effect for formal house structure made of brick; a dampening of the positive effect for house ownership, post-secondary education, employment and urban variables; and a strengthening of the negative effect associated with government grant income. Results for consumer debt servicing for the same period suggests a narrowing of the gender gap; that lower levels of education are less of a barrier; and that the positive effect associated with urban settlement type has diminished.