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The demand for labour in South Africa : a theoretical and empirical approach

Thesis (MComm)--Stellenbosch University, 2004. / ENGLISH ABSTRACT: Nearly five million South Africans were unemployed in 2002 and creating
employment opportunities is a difficult challenge. Before this issue can be tackled,
however, it is critical to understand the problem. This thesis opts to contribute to this
understanding by considering aspects around the demand for labour. The analysis
considers a selection of the theoretical literature on the demand for labour, estimates
key labour market parameters and then undertakes a number of simulations using a
structural model.
There are many conflicting paradigms that can be used to analyse the issue:
microeconomic versus macroeconomic; neoclassical versus structuralist; theoretical
versus empirical and so forth. Some of these paradigms are considered as part of the
attempt to build an empirical framework that can be used to analyse the issue.
The empirical results of the thesis suggest that:
• Higher real wages lead to lowering of the quantity demanded of labour. The
thesis estimates an economy-wide wage elasticity of employment of
approximately -0,67;
• Higher output stimulates the demand for labour. The single equation estimate
of the employment elasticity of output is between 0,66 and 0,75, whilst the
economy-wide estimate is approximately 1,1. The latter takes into account
feedback effects from other macroeconomic variables, such as productivity
and wages;
• There is little evidence to show that the efficiency wage hypothesis holds -
higher productivity leads to higher wages, but the converse is not true;
• Union power increases real wages, indirectly leading to a fall in the demand
for labour. This suggests that the labour market has insiders and outsiders; and
• The relative price of labour is also important, with a fall in the cost of capital
leading to a decrease in the demand for labour.
Simulations suggest that job creation can be achieved through policies that encourage
wage moderation and increase economic growth. There is also a potential role, albeit
limited, for fiscal incentives such as a mooted earned income tax credit. / AFRIKAANSE OPSOMMING: Byna vyf miljoen Suid-Afrikaners was werkloos in 2002 en werkskepping is 'n
moeilike uitdaging. Voordat hierdie kwessie aangepak kan word, is dit egter
noodsaaklik om die probleem te verstaan. Hierdie tesis dra by tot hierdie begrip deur
te fokus op punte rondom die vraag na arbeid. Die ontleding kyk na 'n verskeidenheid
van teoretiese literatuur oor die vraag na arbeid en identifiseer sleutel-parameters vir
die arbeidsmark.
Daar is soveel teenstrydige paradigmas wat gebruik kan word om die kwessie te
ontleed: Mikro-ekonomies teenoor makro-ekonomies; neoklassiek teenoor
strukturalisties; teoreties teenoor empiries, ensovoorts. Sommige van hierdie
paradigmas word bespreek as deel van die poging om 'n empiriese raamwerk te bou
wat gebruik kan word om die kwessie te ontleed.
Die empiriese resultate van die tesis toon:
• Hoër reële lone lei tot 'n verlaging van die hoeveelheid arbeid aangevra. Die
tesis beraam die ekonomiewye loonelastisiteit van indiensneming op sowat -
0,67;
• Hoër uitset stimuleer die vraag na arbeid. Die enkelvergelyking-raming van
die uitset-elastisiteit van indiensneming is tussen 0,66 en 0,75, terwyl die
ekonomiewye raming sowat 1,1 is. Laasgenoemde neem terugvoerinvloede
van ander makro-ekonomiese veranderlikes in ag, bv. produktiwiteit en lone.
• Daar is min bewyse dat die doeltreffende loon-hipotese water hou: Hoër
produktiwiteit lei tot hoër lone, maar die teendeel is onwaar;
• Vakbonde se mag verhoog reële lone, wat indirek lei tot 'n daling van die
vraag na arbeid. Dit dui daarop dat die arbeidsmark 'n binnekring en
buitestaanders het; en
• Die relatiewe prys van arbeid is ook belangrik: 'n Afname van die koste van
kapitaal veroorsaak 'n daling van die vraag na arbeid.
Simulasies toon dat werkskepping bevorder kan word deur beleid wat loonmatiging
en ekonomiese groei bevorder. Daar is ook 'n rol, alhoewel beperk, vir fiskale
insentiewe, b.v. 'n loonsubsidie.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/50130
Date04 1900
CreatorsHavemann, Roy Charles
ContributorsVan der Berg, S., Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageEnglish
TypeThesis
Format206 p. : ill.
RightsStellenbosch University

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