IMPACT OF COMMUNIST PARTIES ON THE INDIVIDUAL DECISION TO JOIN A TRADE UNION: EVIDENCE FROM INDIA

This paper analyzes the impact on individual decisions to unionize of several factors: the reach of communist parties, the degree of political activism, personal attributes of workers, and industrial characteristics. The workers examined are Indian nonagricultural regular workers, using micro-data from the 2004–5 Employment and Unemployment Survey conducted by the National Sample Survey Organisation, linked to state-level factors. A notable result is that the reach of communist parties has considerable effect on unionization probability. Moreover, it seems that the mere existence of communist parties in a state also facilitates unionization to some extent. State-level political activism and unemployment rate also influence the individual decision to join a union. The paper concludes also that a worker's gender, marital status, ethnic background, employment status, experience, occupation, sector of employment, establishment size, and type of industry remain important in the determination of union membership.     

INSTITUTIONAL WAGE EFFECTS: REVISITING UNION AND BARGAINING COUNCIL WAGE PREMIA IN SOUTH AFRICA

The literature on the union wage gap in South Africa is extensive, spanning a range of data sets and methodologies. There is, however, little consensus on the appropriate method to correct for the endogeneity of union membership or the size of the union wage gap. Furthermore, there are very few studies on the bargaining council wage premium in South Africa because of lack of data on the coverage of employees under these agreements. Our study, using 2005 Labour Force Survey data, firstly reconsiders the union wage gap controlling for both firm‐level and job characteristics. When correcting for the endogeneity of union status through a two‐stage selection model and including firm size, type of employment, and non‐wage benefits, we find a much lower union wage premium for African workers in the formal sector than premiums reported in some previous studies. Secondly, our study estimates bargaining council wage premiums for the private and public sectors. We find that extension procedures are present in both private and public bargaining council systems but that unions negotiate for additional gains for their members at the plant level. Furthermore, there is some evidence that unions negotiate for awards for their members in the private sector irrespective of bargaining council coverage.     

REVISITING INFORMAL EMPLOYMENT AND SEGMENTATION IN THE SOUTH AFRICAN LABOUR MARKET

This study revisits the definition of informal employment, and it investigates the puzzle of high open unemployment co‐existing with relatively limited informal employment in South Africa. We estimate earnings equations using data from the September 2004 Labour Force Survey and present evidence of persistent earnings differentials not only between formal and informal employment, but also between types of informal employment. These persistent earnings differentials are suggestive of complex segmentation in the South African labour market and challenge the presentation of informal employment as an undifferentiated residual with no barriers to entry or mobility.     

THE RELATIONSHIP BETWEEN TOURISM AND TRADE IN SOUTH AFRICA

This article explores the relationship between tourist arrivals and trade in South Africa. Two analyses were conducted – a panel data analysis, which included tourism and trade data of 40 countries with South Africa, and a time‐series analysis that involved South Africa's main tourism and trade partners. Cointegration tests, Granger causality and Block exogeneity tests were used to investigate the nature of the relationship. The results of the panel data analysis show that for South Africa as a whole, there is indeed a long‐term relationship between tourist arrivals and trade, and that bidirectional causality exists. The results for the country case studies are mixed, although the evidence is stronger for the hypothesis that tourism causes trade.     

A LONG‐RUN VIEW OF THE UNIVERSITY GENDER GAP IN AUSTRALIA*

Australian universities were first established in the 1850s, well before the introduction of compulsory schooling. From the middle of the twentieth century, the introduction of mass secondary school education and the expansion of the number of universities widened student access to universities. Subjects offered in higher education increased in scope and labour market discrimination diminished. These factors, together with supply‐side changes, meant that women were more easily able to shift into investing in skills. By 1987, Australian women were more likely than men to be enrolled at a university. These aggregate figures, however, disguise considerable heterogeneity across fields of study.     

DISPARITIES IN THE BENEFITS FROM DEMOCRATIC REFORM IN NIGERIA: A GENDER PERSPECTIVE

There is data evidence that welfare has improved post–democratic reform in Nigeria. However, the distribution or concentration of the benefits in subgroups of the population is unknown. In this paper, the question of differential welfare impacts across and within gender following democratic reform in Nigeria is explored. Two related hypotheses are investigated. First, there is no disparity in the income and returns-to-education benefits of democratic reform across genders in Nigeria. Second, there are no within-gender disparities in the impact of democratic reform on income and returns to education in Nigeria. From the results, both hypotheses are rejected. Though men and women both benefitted from democratic reforms, economically significant within- and between-gender differences exist.     

IS THERE EVIDENCE OF A WAGE PENALTY TO FEMALE PART‐TIME EMPLOYMENT IN SOUTH AFRICA?

In this paper, we investigate female part‐time employment in South Africa. Using household survey data for South Africa from 1995 to 2004, we show that women are over‐represented in part‐time employment, and that the growth in part‐time work has been an important feature of the feminisation of the labour force. In contrast to many studies of part‐time work in other countries, however, we find evidence of a significant wage premium to female part‐time employment. The premium is also robust to fixed effects estimations using Labour Force Survey panel data from 2001 to 2004, where controlling for unobservable differences increases its size. The premium persists with different hourly thresholds defining part‐time employment and when we account for possible reporting errors in hours worked.     

A STOCHASTIC ESTIMATION FRAMEWORK FOR COMPONENTS OF THE SOUTH AFRICAN CONSUMER PRICE INDEX

Under inflation targeting in South Africa, it is important to monitor and forecast changes in prices, not only for aggregate measures of the consumer price index, but also its underlying sub-components. Hypotheses about sectoral transmission of policy and shocks are often more specific than hypotheses about overall transmission. This study employs a stochastic framework to estimate richly specified equilibrium correction models, four-quarters-ahead, for the 10 sub-components of the first targeted measure of the consumer price index, CPIX. The stochastic trends are estimated by the Kalman filter, and interpreted as capturing structural breaks and institutional change, a frequent cause of forecast failure. The trends suggest the design of deterministic split trends for use in recursive forecasting models, towards more accurate overall inflation forecasting. This research also has practical use for monetary policy in allowing identification of sectoral sources of inflation.     

YOUTH UNEMPLOYMENT,FIRM SIZE AND RESERVATION WAGES IN SOUTH AFRICA

The level of youth unemployment in South Africa is much higher than in comparator countries. We investigate whether one of the reasons may be that the wages young people want or need are above those that they could reasonably expect to earn given their characteristics. Unlike previous work on the relationship between reservation wages and unemployment we differentiate between wages in different sizes of firms. Larger firms pay more and thus, even if reservation wages are similar to average predicted wages, they may be above the wages that young people could expect to earn in smaller firms. We find that this is the case.     

THE MEASUREMENT OF EMPLOYMENT STATUS IN SOUTH AFRICA USING COHORT ANALYSIS, 1994‐20041

We analyse trends in employment, unemployment and labour force participation by simple graphical techniques, using all the October Household Surveys and the September Labour Force Surveys. We show that African male employment in 1995 seems high, when compared to all the other surveys. Furthermore much of the increase in African female labour force participation is concentrated in the period 1998 to 2000, which suggests that measurement and sampling changes may be partially responsible for the trend. We track cohorts of individuals over the eleven years for which we have data. We show that young people are leaving school earlier, while being better educated than their elders. They are not, however, being absorbed into employment at a faster rate. This has led to a spike in youth unemployment.     

TRADE LIBERALIZATION AND WAGE PREMIUM IN ARGENTINA: THE ROLE OF TRADE FACTOR INTENSITY

During the 1990s, several Latin American countries implemented policies directed to the removal of barriers on international trade. However, there is a perception that reforms, especially trade liberalization, failed to deliver on their promises, easing the way for policies aimed at reversing some of them. Following Wood's hypothesis, we allow for the effects of liberalization to vary, depending on the skill intensity of production. The evidence confirms that the role of trade liberalization has been relatively small, but controlling for the presence of endogeneity gives larger estimates. Contrary to previous evidence, the wage premium of skilled workers was more sensitive to the increase of skill‐intensive exports than to that of unskilled‐intensive imports.     

VERTICAL INTEGRATION IN SOUTH AFRICAN TELECOMMUNICATIONS: A COMPETITION ANALYSIS

This article develops an analytical framework that can be used to assess competition in South African telecommunications and, thereafter, applies this framework in an evaluation of vertical integration patterns in the telecommunications industry. It is shown that, despite recent regulatory reforms, substantial vertical competition concerns remain unaddressed in both fixed line and mobile telecommunications markets.     

THE EVOLUTION OF GENDER EARNINGS GAPS AND DISCRIMINATION IN URBAN CHINA, 1988–95

This paper analyzes the impact of market liberalization on gender earnings differentials and discrimination against women in urban China at the beginning of the 1990s. The observed stability in the overall gender earnings gap between 1988 and 1995 is shown to result from a complex set of evolutions across enterprises, earnings distributions, and time. Our results highlight the interplay of opposing forces, with economic reforms contributing to changes in managers’ behaviors in different dimensions. On the one hand, by bringing more competition, liberalization favored a reduction in discriminating behaviors in both urban collectives and foreign‐invested enterprises; on the other hand, by relaxing institutional rules, it led to a loosening of the government's egalitarian wage‐setting policies, leaving more space for discrimination in state‐owned enterprises.     

THE ROLE OF THE EXCHANGE RATE IN A NEW KEYNESIAN DSGE MODEL FOR THE SOUTH AFRICAN ECONOMY

We build a small open economy New Keynesian dynamic stochastic general equilibrium model for South Africa similar to Steinbach et al. We abandon their assumption of complete risk sharing with the foreign economy, and introduce country risk shocks to allow deviations from uncovered interest rate parity. These changes allow us to include the exchange rate as an observable variable in the estimation of the model. Using forecast error variance decompositions and historical decompositions, we show that country risk shocks have sizable effects on the South African business cycle. We also explore the optimal monetary policy implications of our model within the context of Taylor rules.     

INFLATION IN SOUTH AFRICA: A TIME‐SERIES VIEW ACROSS SECTORS USING LONG‐RANGE DEPENDENCE

In this paper I examine the time‐series evolution of the log consumer price index series in South Africa, disaggregating the data by sectors. I examine the time period 1990m1‐2008m12, i.e. focusing on the post‐apartheid period. I used methodologies based on fractional integration using parametric and semiparametric techniques. The results indicate that the (total) inflation rate in South Africa is long memory, with an order of integration in the range (0, 0.5). The same happens with most of the data disaggregated by sectors with values of d above 1 in the log prices. Evidence of I(0) inflation is obtained in some cases for “fruits and nuts”, “vegetables” and “sugar”, and evidence of mean reversion in the log prices is only obtained in the case of “fish and other seafood”.     

STRUCTURE, CONDUCT AND PERFORMANCE ANALYSIS OF THE SOUTH AFRICAN AUTO INSURANCE MARKET: 1980-2000

The traditional structure-conduct-performance framework makes the explicit prediction that market structure determines market conduct, performance and power. The primary goal of this study is to evaluate this prediction using the South African (SA) short-term auto insurance market. The empirical evidence shows that a link between market structure and market conduct, performance and/or power is not present. "Prices" and profits are not statistically significantly related to various sellers' concentration measure and do not follow any explicit trend over time. By construction, profits are directly related to "prices" and follow a cyclical trend, as observed in other countries. A secondary goal of this paper is to compare the findings for the US auto insurance market with the empirical evidence on the SA auto insurance market. While there are few similarities, there is an underwriting cycle in the SA auto insurance market such as is observed for the US auto insurance market.     

THE DETERMINANTS OF EMPLOYMENT: A SECTORAL ANALYSIS FOR TURKEY

This paper analyzes the effects of wages, openness, and demand on employment in the private manufacturing industry in Turkey based on panel data for the period of 1973–2001. The wage elasticity of employment increases after trade liberalization. Nevertheless, output elasticity of labor demand is higher than wage elasticity in the total manufacturing sector for the whole estimation period, and in the high- and medium-skilled sectors in the post-1980 period. Trade effects, after controlling for output, seem to have a low economic significance. The positive effects of exports on the labor intensity of production are low or are offset by labor saving effects of foreign trade, particularly in the high- and medium-skilled sectors. On the other hand, there is some evidence of a negative import effect in the low-skilled sectors, whereas in the high- and medium-skilled group a complementary relation between domestic labor and imported inputs dominates the effects.     

FORECASTING CURRENCY CRISES: WHICH METHODS SIGNALED THE SOUTH AFRICAN CRISIS OF JUNE 2006?

In this paper we test the ability of three of the most popular methods to forecast South African currency crises with a special emphasis on their out‐of‐sample performance. We choose the latest crisis of June 2006 to conduct an out‐of‐sample experiment. The results show that the signals approach was not able to forecast the out‐of‐sample crisis correctly; the probit approach was able to predict the crisis but only with models, that were based on raw data. The Markov‐regime‐switching approach predicts the out‐of‐sample crisis well. However, the results are not straightforward. In‐sample, the probit models performed remarkably well and were also able to detect, at least to some extent, out‐of‐sample currency crises before their occurrence. The recommendation is to not restrict the forecasting to only one approach.     

EDUCATIONAL ATTAINMENT DIFFERENCES BETWEEN POPULATION GROUPS IN SOUTH AFRICA AND THE TIMING AND NUMBER OF BIRTHS

From 1981 to 2005, the total fertility rate in South Africa has been reduced from an estimated level of 4.6 to 2.8 children per woman. The relative differences in the total fertility rate between population groups, however, remain large. Our empirical analysis of the determinants of the timing of births shows that better‐educated women schedule birth later and have fewer children. The differences in education between population groups account for a substantive part (up to 40%) of the differences in completed fertility between the population groups. Our findings suggest that educational reforms aimed at equal access to education, which benefit African women most, may not only improve the quality of life of women but also, through their impact on fertility behaviour, yield long‐run benefits, as they will have fewer children and more resources to invest in the next generation.     

A Case of Sticky Floors: Gender Wage Differentials in Thailand

Using 2004 Household Socio‐Economic Survey data for Thailand, we explore the gender wage differentials across the entire unconditional wage distribution and find a strong sticky floor effect. Glass ceilings, although observed along with sticky floors in the raw data and pooled regressions, disappear in the counterfactual decompositions, suggesting a strong sticky floor pattern in gender wage differentials in Thailand. Whereas the evidence for most European countries points to glass ceilings, our findings for Thailand are qualitatively similar to those from other South Asian and Southeast Asian countries for which evidence exists; namely, Singapore, the Philippines and Sri Lanka.