Employment creation through the provision of social development services: exploring the options

The high unemployment rate in South Africa is a central concern of policy makers. Because there are only a few substantial labour intensive industries, led by the private sector, it has become essential to explore other less mainstream avenues for employment creation. The role of public works programmes has historically focused on the infrastructure sector, but the Expanded Public Works Programme includes the social sector. The government has at its disposal a strong policy instrument – the provision of a range of services to meet basic needs – and so could, in the medium term, create a large number of jobs through social development services, the demand for which vastly exceeds their provision. Basic social development needs programmes target a large number of unskilled unemployed and promise the possibility of affordable employment creation. Such programmes include Early Childhood Development (ECD) and Home and Community Based Care (HCBC) as identified by the Social Sector Plan. This article explores these options.     

The response of labour effort to falling real wages: The Mexican peso devaluation of February 1982

This paper reports empirical evidence on the effect of the February 1982 Mexican peso devaluation with its concomitant reduction in real income on the output of individual workers. Using a set of pooled data for 46 workers employed in two textile plants in Mexicali over a 22-week period the regression results show a significant increase in average output of about 15% in response to the 25% decrease in wages due to the devaluation. The study also finds that there was no significant response in output to the legislated, annual increase in money wages of January 1982.     

The effect of human capital on the economic status of divorced and separated women: Differences by race

This study investigated the impact of investments in human capital on the economic well-being of black and white women immediately following marital disruption. It also explored the extent to which the observed differences in income between the two groups were due to differences in the levels of qualities (endowments) or differences in the impact of these qualities (discrimination). The average differences in endowments explained almost two-thirds of the income gap between black and white women. Most of this explanatory power was due to differences in educational attainment, work experience, and region.     

The impact of international portfolio composition on consumption risk sharing

Recent empirical work has shown that ongoing international financial integration facilitates cross-country consumption risk sharing. These studies typically find that countries with high equity home bias exhibit relatively low international consumption risk sharing. We extend this line of research and demonstrate that it is not only a country's equity home bias that prevents consumption risk sharing. In addition, the composition of a country's foreign asset portfolio plays an important role. Using panel-data regression for a group of OECD countries over the period 1980–2007, we show that foreign investment bias has additional explanatory power for consumption risk sharing.