Publication:
Does Employing Workers or Accepting Work Pay? Analyzing Labor Costs in South Africa

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dc.contributor.authorLangbein, Joerg
dc.contributor.authorWeber, Michael
dc.date.accessioned2018-08-10T20:52:42Z
dc.date.available2018-08-10T20:52:42Z
dc.date.issued2018-04-30
dc.description.abstractFor more than a decade, South Africa has experienced falling labor force participation rates while maintaining relatively high unemployment rates, particularly among its youth. This paper examines the role of labor costs from the perspectives of employers and workers by combining information from national accounts and household surveys. To better understand the employer’s perspective, we calculate the labor costs and set them in relation to productivity, thereby deriving unit labor costs. To analyze the worker’s perspective, we disentangle the tax-wedge and further work-related costs borne by workers. The results show that labor costs in the South African economy increased disproportionally relative to productivity. This is largely due to labor cost growth in the manufacturing and industry sector. An international comparison of unit labor costs shows that other countries with similar unit labor cost levels have not registered such a strong increase over the same period. To identify causes for the increase in labor costs, we decompose the determinants using household data and follow the development of work-related costs over time. We compare the results for South Africa to a set of comparator countries and identify unionization, specific sectors and skill mismatch as particularly influential for South Africa. The results show that stagnating productivity may be associated with a lack of highly qualified workers, also in comparison with benchmark countries. This note was prepared as a background note to the South Africa Systematic Country Diagnostic.en
dc.identifierhttp://documents.worldbank.org/curated/en/245291531921398385/Does-employing-workers-or-accepting-work-pay-Analyzing-labor-costs-in-South-Africa
dc.identifier.doi10.1596/30194
dc.identifier.urihttps://hdl.handle.net/10986/30194
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectLABOR FORCE PARTICIPATION
dc.subjectLABOR MARKET
dc.subjectWAGES
dc.subjectUNEMPLOYMENT
dc.subjectTAXATION
dc.subjectLABOR COSTS
dc.subjectUNIONIZATION
dc.subjectTRADE UNION
dc.subjectPRODUCTIVITY
dc.subjectSKILLED LABOR
dc.titleDoes Employing Workers or Accepting Work Pay? Analyzing Labor Costs in South Africaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleDoes Employing Workers or Accepting Work Pay? Analyzing Labor Costs in South Africa
okr.date.disclosure2018-07-18
okr.doctypePublications & Research
okr.doctypePublications & Research::Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/245291531921398385/Does-employing-workers-or-accepting-work-pay-Analyzing-labor-costs-in-South-Africa
okr.guid245291531921398385
okr.identifier.doi10.1596/30194
okr.identifier.externaldocumentum090224b085db0a7a_1_0
okr.identifier.internaldocumentum30269614
okr.identifier.report128578
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/245291531921398385/pdf/128578-WP-P161945-PUBLIC-ZAF-SCD-Background-Paper-Analyzing-Labor-Costs-20180619.pdfen
okr.region.administrativeAfrica
okr.region.countrySouth Africa
okr.topicPrivate Sector Development::Private Sector Economics
okr.topicSocial Protections and Labor::Labor Markets
okr.topicSocial Protections and Labor::Skills Development and Labor Force Training
okr.topicSocial Protections and Labor::Wages, Compensation & Benefits
okr.unitWB Off:Pretoria - Southern AFR 1 (AFCS1)
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