Publication:
Wage Subsidy and Labor Market Flexibility in South Africa

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dc.contributor.authorKearney, Marna
dc.contributor.authorGo, Delfin S.
dc.contributor.authorKorman, Vijdan
dc.contributor.authorRobinson, Sherman
dc.contributor.authorThierfelder, Karen
dc.date.accessioned2012-03-19T19:09:24Z
dc.date.available2012-03-19T19:09:24Z
dc.date.issued2009-03-01
dc.description.abstractIn this paper, the authors use a highly disaggregate general equilibrium model to analyze the feasibility of a wage subsidy to unskilled workers in South Africa, isolating and estimating its potential employment effects and fiscal cost. They capture the structural characteristics of the labor market with several labor categories and substitution possibilities, linking the economy-wide results on relative prices, wages, and employment to a micro-simulation model with occupational choice probabilities in order to investigate the poverty and distributional consequences of the policy. The impact of a wage subsidy on employment, poverty, and inequality in South Africa depends greatly on the elasticities of substitution of factors of production, being very minimal if unskilled and skilled labor are complements in production. The desired results are attainable only if there is sufficient flexibility in the labor market. Although the impact in a low case scenario can be improved by supporting policies that relax the skill constraint and increase the production capacity of the economy especially towards labor-intensive sectors, the gains from a wage subsidy are still modest if the labor market remains very rigid.en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090323092541
dc.identifier.doi10.1596/1813-9450-4871
dc.identifier.urihttps://hdl.handle.net/10986/4066
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research working paper ; no. WPS 4871
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectADJUSTMENT PROCESS
dc.subjectAGGREGATE DEMAND
dc.subjectAGGREGATE INCOME
dc.subjectAGRICULTURE
dc.subjectANNUAL EARNINGS
dc.subjectANNUAL INCOME
dc.subjectANNUAL WAGE
dc.subjectAVERAGE EARNINGS
dc.subjectAVERAGE GROWTH
dc.subjectAVERAGE WAGE
dc.subjectAVERAGE WAGES
dc.subjectBENCHMARK
dc.subjectBENEFICIARIES
dc.subjectCALCULATIONS
dc.subjectCLERKS
dc.subjectCOLLEGE DEGREE
dc.subjectCOMMODITIES
dc.subjectCONCENTRATION RATIOS
dc.subjectCONSUMPTION EXPENDITURES
dc.subjectCONTRIBUTION
dc.subjectDEVELOPMENT POLICY
dc.subjectDISCOURAGED WORKERS
dc.subjectDOMESTIC WORKERS
dc.subjectEARNING
dc.subjectEARNINGS
dc.subjectECONOMETRIC ANALYSIS
dc.subjectECONOMETRIC MODELING
dc.subjectECONOMETRICS
dc.subjectECONOMIC ACTIVITIES
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC ANALYSIS
dc.subjectECONOMIC FRAMEWORK
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC MANAGEMENT
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC SECTORS
dc.subjectECONOMIC STRUCTURE
dc.subjectECONOMICS
dc.subjectELASTICITY
dc.subjectELASTICITY OF SUBSTITUTION
dc.subjectEMPLOYEE
dc.subjectEMPLOYMENT
dc.subjectEMPLOYMENT EFFECT
dc.subjectEMPLOYMENT EFFECTS
dc.subjectEMPLOYMENT GROWTH
dc.subjectEMPLOYMENT IMPACT
dc.subjectEMPLOYMENT IMPACTS
dc.subjectEMPLOYMENT INCREASES
dc.subjectEMPLOYMENT LEVEL
dc.subjectEMPLOYMENT POLICY
dc.subjectEMPLOYMENT STATUS
dc.subjectEMPLOYMENT TRENDS
dc.subjectEQUILIBRIUM UNEMPLOYMENT
dc.subjectEXCHANGE RATE
dc.subjectEXPORTS
dc.subjectFACTOR DEMAND
dc.subjectFACTOR MARKETS
dc.subjectFAMILY MEMBER
dc.subjectFEMALE WORKERS
dc.subjectFINANCIAL SECTORS
dc.subjectFINANCIAL SERVICES
dc.subjectFIRM SURVEY
dc.subjectFORMAL LABOR MARKET
dc.subjectFUTURE RESEARCH
dc.subjectGDP
dc.subjectGENERAL EQUILIBRIUM
dc.subjectGENERAL EQUILIBRIUM ANALYSIS
dc.subjectGINI COEFFICIENT
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectHIGH UNEMPLOYMENT
dc.subjectHIGH UNEMPLOYMENT RATES
dc.subjectHOUSEHOLD CONSUMPTION
dc.subjectHOUSEHOLD EXPENDITURE
dc.subjectHOUSEHOLD EXPENDITURES
dc.subjectHOUSEHOLD INCOME
dc.subjectHOUSEHOLD INCOMES
dc.subjectHOUSEHOLD SURVEY
dc.subjectHUMAN CAPITAL
dc.subjectIMPERFECT COMPETITION
dc.subjectINCENTIVE EFFECTS
dc.subjectINCOME DISTRIBUTION
dc.subjectINCOME GROUP
dc.subjectINCOME GROUPS
dc.subjectINCOME SOURCES
dc.subjectINCOME TAX
dc.subjectINCOME TAXES
dc.subjectINCOMES
dc.subjectINEQUALITY
dc.subjectINFORMAL ECONOMY
dc.subjectINFORMAL SECTOR
dc.subjectINFORMAL SECTOR WORKERS
dc.subjectINVENTORY
dc.subjectJOB SEARCH
dc.subjectJOBS
dc.subjectLABOR COST
dc.subjectLABOR COSTS
dc.subjectLABOR DEMAND
dc.subjectLABOR FORCE
dc.subjectLABOR FORCE GROWTH
dc.subjectLABOR MARKET
dc.subjectLABOR MARKET CONDITIONS
dc.subjectLABOR MARKET FLEXIBILITY
dc.subjectLABOR MARKET INSTITUTIONS
dc.subjectLABOR MARKET ISSUES
dc.subjectLABOR MARKET OUTCOMES
dc.subjectLABOR MARKET PROBLEMS
dc.subjectLABOR MARKET RIGIDITIES
dc.subjectLABOR MARKET RIGIDITY
dc.subjectLABOR MARKET SITUATION
dc.subjectLABOR MARKETS
dc.subjectLABOR MOBILITY
dc.subjectLABOR ORGANIZATION
dc.subjectLABOR POLICY
dc.subjectLABOR REGULATIONS
dc.subjectLABOR RELATIONS
dc.subjectLABOR SUPPLY
dc.subjectLABOR UNIONS
dc.subjectLABOUR
dc.subjectLABOUR DEMAND
dc.subjectLABOUR FORCE
dc.subjectLABOUR MARKET
dc.subjectLABOUR MARKETS
dc.subjectLEVEL OF EDUCATION
dc.subjectLUMP SUM
dc.subjectMACROECONOMIC ADJUSTMENT
dc.subjectMACROECONOMIC MANAGEMENT
dc.subjectMACROECONOMICS
dc.subjectMALE WORKERS
dc.subjectMANUFACTURING INDUSTRY
dc.subjectMARKET WAGE
dc.subjectMARKET WAGES
dc.subjectMARRIED COUPLES
dc.subjectMINIMUM WAGE
dc.subjectMINIMUM WAGES
dc.subjectMULTIPLIERS
dc.subjectNEW JOB
dc.subjectNEW JOBS
dc.subjectOCCUPATION
dc.subjectOCCUPATIONS
dc.subjectOPEN ECONOMIES
dc.subjectPAID WORKERS
dc.subjectPENSION
dc.subjectPER CAPITA INCOME
dc.subjectPERMANENT WORKERS
dc.subjectPOVERTY LEVELS
dc.subjectPOVERTY RATE
dc.subjectPOVERTY RATES
dc.subjectPRELIMINARY EVIDENCE
dc.subjectPRESENT ANALYSIS
dc.subjectPRESENT STUDY
dc.subjectPRIVATE INVESTMENT
dc.subjectPRIVATE SAVINGS
dc.subjectPROBABILITIES
dc.subjectPROBABILITY
dc.subjectPRODUCTION CAPACITY
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION INCREASES
dc.subjectPRODUCTION PROCESS
dc.subjectPRODUCTIVITY
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPUBLIC EXPENDITURES
dc.subjectPUBLIC SERVICES
dc.subjectREAL GDP
dc.subjectREAL WAGE
dc.subjectREAL WAGES
dc.subjectRETAIL TRADE
dc.subjectRURAL POVERTY
dc.subjectSALES
dc.subjectSAVINGS
dc.subjectSCALE EFFECTS
dc.subjectSELF-EMPLOYMENT
dc.subjectSELF-EMPLOYMENT INCOME
dc.subjectSEMISKILLED WORKERS
dc.subjectSENIOR
dc.subjectSERVICE SECTOR
dc.subjectSERVICE SECTORS
dc.subjectSKILL GROUPS
dc.subjectSKILL TYPE
dc.subjectSKILLED LABOR
dc.subjectSKILLED WORKER
dc.subjectSOCIAL SECURITY
dc.subjectSTRUCTURAL CHANGE
dc.subjectSTRUCTURAL UNEMPLOYMENT
dc.subjectSUBSIDIZED JOB
dc.subjectSUM OF MONEY
dc.subjectTAX RATE
dc.subjectTAX REVENUES
dc.subjectTAXATION
dc.subjectTECHNICAL ASSISTANCE
dc.subjectTEMPORARY WORKERS
dc.subjectTOTAL EMPLOYMENT
dc.subjectTOTAL LABOR FORCE
dc.subjectTOTAL WAGE
dc.subjectTRADE LIBERALIZATION
dc.subjectTRADE POLICIES
dc.subjectTRAINING PROGRAMS
dc.subjectUNEMPLOYED
dc.subjectUNEMPLOYED INDIVIDUAL
dc.subjectUNEMPLOYED INDIVIDUALS
dc.subjectUNEMPLOYED PEOPLE
dc.subjectUNEMPLOYMENT
dc.subjectUNEMPLOYMENT PROBLEM
dc.subjectUNEMPLOYMENT RATE
dc.subjectUNION MEMBERSHIP
dc.subjectUNSKILLED WORKERS
dc.subjectVALUE ADDED
dc.subjectVOCATIONAL SCHOOL
dc.subjectVOLUNTARY UNEMPLOYMENT
dc.subjectWAGE BILL
dc.subjectWAGE COST
dc.subjectWAGE DIFFERENTIALS
dc.subjectWAGE EMPLOYMENT
dc.subjectWAGE FLEXIBILITY
dc.subjectWAGE GAINS
dc.subjectWAGE INCREASES
dc.subjectWAGE LEVEL
dc.subjectWAGE SUBSIDIES
dc.subjectWAGE SUBSIDY
dc.subjectWAGE SUBSIDY SCHEME
dc.subjectWORK EXPERIENCE
dc.subjectWORK FORCE
dc.subjectWORKING POOR
dc.subjectWTO
dc.titleWage Subsidy and Labor Market Flexibility in South Africaen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crossref.titleWage Subsidy And Labor Market Flexibility In South Africa
okr.date.doiregistration2025-04-10T12:19:56.752720Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090323092541
okr.globalpracticeSocial Protection and Labor
okr.guid785421468103143800
okr.identifier.doi10.1596/1813-9450-4871
okr.identifier.externaldocumentum000158349_20090323092541
okr.identifier.internaldocumentum10372263
okr.identifier.reportWPS4871
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2009/03/23/000158349_20090323092541/Rendered/PDF/WPS4871.pdfen
okr.region.administrativeAfrica
okr.region.administrativeAfrica
okr.region.geographicalSouthern Africa
okr.topicSocial Protections and Labor::Labor Policies
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication165325f4-d27a-5241-80a4-eb5495c41c24
relation.isAuthorOfPublication.latestForDiscovery165325f4-d27a-5241-80a4-eb5495c41c24
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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