A Tale of Two Impacts: Minimum Wage Outcomes in South Africa

A Tale of Two Impacts: Minimum Wage Outcomes in South Africa – the latest post from DPRU Director, Prof Haroon Bhorat, for the World Bank’s Future Development* blog.   

10 December 2013 – So what are the potential economic consequences arising from the imposition of a minimum wage? The advent of better data, improved statistical techniques and the proliferation of country studies have made economists careful about pre-judging the impact of minimum wages on employment and wages. Evidence for South Africa, some twenty years after the demise of apartheid, is compelling.  In a two-part study, Prof Bhorat and his co-authors find an intriguing set of contrasting economic outcomes arising from the imposition of a series of sectoral minimum wage laws. 

He references two recent studies: “Estimating the Impact of Minimum Wages on Employment, Wages and Non-wage Benefits: The Case of Agriculture in South Africa” (a DPRU working paper co-authored with Ravi Kanbur and Benjamin Stanwix), and “The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa” (an article in the IZA Journal of Labor & Development 2013, 2:1, co-authored with Ravi Kanbur and Natasha Mayet).

* Future Development informs and stimulates debate on key development issues.