Minimum Wages, Employment and Household Poverty: Investigating the Impact of Sectoral Determinations

Description

This paper investigates the impacts of minimum wages on employment, wage earnings and poverty at the household level both in a theoretical framework and in an applied modelling framework based on South African data. Section 2 reviews the theory and literature, while section 3 provides a detailed analysis of the possible linkages between minimum wages, employment, household incomes and poverty. Section 4 present results from two types of models used to evaluate the possible impacts of minimum wages. The first is a so-called partial equilibrium model that considers the labour market in isolation from the rest of the economy, although some links are drawn between the labour market and households. This simple model allows us to evaluate how labour market changes affect household incomes and hence poverty at the household level. The second is a general equilibrium model that, in addition to the factor market-household linkages, considers all the other linkages and feedback effects in the economy. Section 5 draws general conclusions.

Information

Evaluation Number:
15
Score:
4.8
Report Approval:
01 March 2008
Published:
04 March 2013
Initiated By:
Unknown
Undertaken By:
Development Policy Research Unit (DPRU)
Evaluation Period:
Unknown
Evaluation Area:
Labour issues & employment
National Outcome:
National Outcome 4: Decent employment through inclusive economic growth.
National Outcome 6: An efficient, competitive and responsive economic infrastructure network.
Commissioned By:
Evaluation Type:
Diagnostic
Evaluation Subject:
Policy
Geographic Scope:
National

Evaluation Documents

File Name
15 EQAT 20130320 sh_mb.pdf
Evaluation of Sectoral Determinations on Income Employment Poverty.pdf 15.pdf

Similar Evaluations

Analysing Wage Formation in the South African Labour Market: The Role of Bargaining Councils

The main objective of this study is to evaluate the role of bargaining councils in wage formation in the South African labour market. Specifically, the study aims to determine what premium is...
Evaluation Number:
117
Report Approval:
01 September 2007
Published:
18 February 2013
Initiated By:
Department of Labour

Labour Reform in South Africa: Measuring Regulation and Synthesis of Policy Suggestions

Perhaps the most prominent representation of the welfare challenges facing post-apartheid South Africa, is the economy’s unemployment rate. Hence, this is an economy although formally categorised as...
Evaluation Number:
30
Report Approval:
01 June 2007
Published:
21 February 2013
Initiated By:
Department of Labour

Tracking Progress on the Implementation and Impact of the Employment Equity Act since its inception

The aim of the Employment Equity Act (EEA) of 1998 is to redress fundamental labour market inequities and to minimise discrimination on the basis of demographic profile (race, gender) as well as...
Evaluation Number:
13
Report Approval:
01 March 2008
Published:
30 January 2013
Initiated By:
Department of Labour

The cost of credit, access to credit and associated market practices 2011

Prior to the introduction of the National Credit Act (NCA) on the 1st June 2007, aggregate credit extended to households rose by 24% per annum between June 2005 and May 2007. Although exchange...
Evaluation Number:
96
Report Approval:
31 July 2011
Published:
19 February 2013
Initiated By:
National Credit Regulator

A Review of Labour Markets in South Africa: The impact of HIV/AIDS on the Labour Market

The research paper under review is one of seven papers produced as part of an overall ‘scoping exercise’. The purpose of which was to “review available information on the functioning of the labour...
Evaluation Number:
123
Report Approval:
01 October 2005
Published:
04 March 2013
Initiated By:
Employment and Ecomomic Policy Research Programme - Human Sciences Research Council