OpenUCT :: Browsing by Author "Bhorat, Haroon"

Browsing by Author "Bhorat, Haroon"

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Open Access
Africa's Jobs Challenge
(2013-10) Bhorat, Haroon; Naidoo, Karmen
There is great opportunity for potential growth in Africa, however, there is also the increasing challenge of promoting growth that is job-creating. It is evident that the continent has much potential to achieve the long-term growth that is necessary for reducing inequality and alleviating poverty. In order to do this, there are key pitfalls that need to be addressed, most importantly, infrastructure development and improved governance and rule of law.
Open Access
Agricultural change and farmworker living standards in post-apartheid South Africa
(2019) Le Roux, Leonard; Bhorat, Haroon; Conradie, Beatrice
Commercial agriculture in South Africa has been subject to accelerated regulatory and economic change in the time since the country’s democratization. This dissertation focusses on some of the interactions of these changes with the prospects of low-income farmworkers and farm dwellers through exploring two interlinked questions. The first of these asks whether consolidation in the industry has extended to growing firm size and in-turn, whether farmworkers in larger firms earn higher wages than those in small firms. An analysis of the firm-size earnings relationship using long run labour survey data is discussed in the context of current debates on agrarian policy. The second question relates to the process of rural-urban migration off commercial farms and into urban areas in the post-apartheid period. Using a panel of individuals and in so doing, controlling for unobserved individual heterogeneity and initial household fixed effects, a difference in differences approach is used to estimate the impacts of migration on various measures of individual living standards. Together these two questions attempt to characterise aspects of the changing nature of life on farms. The results suggest that there exists a significant firm-size earnings premium for farmworkers and that this may be increasing over time. In addition the National Income Dynamics Study (NIDS) data suggests that migration off farms has mixed implications for living standards, but is associated with significant gains in per-capita income, electricity and sanitation access.
Open Access
Analysing Wage Formation in the South African Labour Market: The Role of Bargaining Councils
(2009-07) Bhorat, Haroon; van der Westhuizen, Carlene; Goga, Sumayya
This policy document was compiled from the DPRU Working Paper 09/135, Analysing Wage Formation in the South African Labour Market: The Role of Bargaining Councils by Haroon Bhorat, Carlene van der Westhuizen and Sumayya Goga.
Open Access
Analysing Wage Formation in the South African Labour Markets: The Role of Bargaining Councils
(2009-01) Bhorat, Haroon; van der Westhuizen, Carlene; Goga, Sumayya
The role of bargaining councils, the central pillar of collective bargaining in South Africa, in the formation of wages is important in the context of high unemployment rates in South Africa. In this study we find that while institutionalised collective bargaining system covered substantially more formal sector workers in 2005 (30 percent) compared to 1995 (15 percent), this still meant that less than a third of the formally employed were covered by bargaining councils.
Open Access
Are Wage Adjustments an Effective Mechanism for Poverty Alleviation? Some Simulations for Domestic and Farm Workers
(2000-09) Bhorat, Haroon
This paper utilises a basic simulation exercise to analyse the possible poverty and employment reducing effects, of instituting a minimum wage in the South African labour market. The simulation is undertaken for three groups of unskilled workers, namely domestic workers, farm workers and drivers.
Open Access
Assessing the effects of two agricultural minimum wage shocks in South Africa
(2017) Van der Zee, Kirsten; Bhorat, Haroon
In March of 2003, South Africa's first agricultural minimum wage was implemented. Ten years later, following major strikes and protests among farm workers in theWestern Cape, the prescribed agricultural minimum wage was increased by a considerable 52 percent from R69 per day to R105 per day, significantly more than the usual inflation rate increases. This paper investigates the impacts of these two minimum wage shocks, specifically assessing the labour market response in terms of employment, wages and working conditions, as well as assessing how farmers adjusted their operations in expectation of the minimum wage hike. The findings indicate that the probability of employment as a farm worker decreased in response to both minimum wage shocks, however the disemployment effect was sharper for the introduction of the minimum wage than it was for the 2013 amendment. It is observed that relatively more part-time workers lost their jobs in response to the first shock, resulting in there being almost no part-time workers in the sector by the time the second minimum wage shock occurred. Wages increased significantly in response to both minimum wage shocks, however despite this, violation consistently remained a challenge in the sector. Lastly, the paper finds that employment, wages and contract coverage began adjusting up to two quarters prior to the 2013 legislated increase in the minimum wage, suggesting that there are dynamic responses to minimum wages, and that farmers may make operational decisions in expectation of new legislation.
Open Access
Correlates of Vulnerability in the South African Labour Market
(1999-05) Bhorat, Haroon; Leibbrandt, Murray
Using the October Household Survey of 1995 (OHS95), this paper seeks to understand the determinants of indigence in the South African labour market. To this end the study presents a description of the labour market, focusing on how covariates such as race, gender, education and location help explain the poverty observed in the labour market.
Open Access
The determinants and impact of short-term business insurance on SMEs in South Africa
(2012) Rey, Angelique; Bhorat, Haroon
South Africa is a developing country riddled with high levels of unemployment. SMEs hire more than 50% of the workforce, and therefore adequate protection and support of these firms is crucial. The goal of this research is twofold: Firstly, to identify the determinants of business insurance take-up by SME owners. Secondly, to determine whether business insurance and firm performance are positively and significantly related. A probit model is used to determine the probability of business insurance take-up and a multiple regression is run to identify the effect of business insurance on firm performance. An IV is also run to control for potential endogeneity. Race, funeral and life insurance, education, personal income and size of the firm are key factors determining insurance take-up. Business insurance is found to be positive and statistically significant in both the OLS and IV regressions suggesting that business insurance improves the performance of SMEs.
Open Access
Developments in the South African credit market and analysis on indebted consumers using NIDS data
(2016) Choonoo, Samantha; Bhorat, Haroon
Household debt measures provide vital information regarding society's financial wellbeing. This paper uses a comparative static analysis approach to evaluate total and consumer debt at the household level using two waves of NIDS data relating to the periods 2008 and 2012. The descriptive analysis is based on the share of income servicing debt by various household characteristics while the econometric analysis models the determinants of debt servicing at the household level. The descriptive statistics illustrates the financial vulnerable position of low income households as they spend a proportionally larger share of household income on debt payments and their main sources of credit are from retailers, hire purchase agreements and loan sharks. The OLS and Median Quantile regression results for 2008 and 2012 under total debt analysis indicate a dampening of the negative effect for female, Black, Coloured, no schooling and primary schooling variables; a strengthening of the positive effect for formal house structure made of brick; a dampening of the positive effect for house ownership, post-secondary education, employment and urban variables; and a strengthening of the negative effect associated with government grant income. Results for consumer debt servicing for the same period suggests a narrowing of the gender gap; that lower levels of education are less of a barrier; and that the positive effect associated with urban settlement type has diminished.
Open Access
Does a Child Penalty Exist in the Post-apartheid South African Labour Market?
(2018) Magadla, Sibahle Siphokazi Sinalo; Leibbrandt, Murray; Bhorat, Haroon
This study examines whether there exists a motherhood (or child) penalty for female employees in post-apartheid South Africa using three cross sections of data between 2001 and 2007. The Mincerian regression results indicate that a motherhood penalty exists, ceteris paribus. Using unconditional quantile regressions (RIF-OLS) to analyse the wage returns along the wage distribution, the study finds that there exists a motherhood wage penalty at lower wage levels, but this effect wanes in prominence at higher wage quantiles. At higher wage levels, mothers earn higher wages than their child-free counterparts, especially if they are married. Furthermore, the study applies Oaxaca-Blinder type decompositions within the RIF framework to decompose changes in the motherhood wage gap along the distribution into explained and unexplained contributions related to a range of factors. The decomposition results indicate that at lower quantiles, the wages of mothers minus wages of non-mothers is negative, but the relationship alternates at higher quantiles. Moreover, majority of the wage differential between mothers and non-mothers is due to unexplained characteristics. This implies that there are additional relevant factors such as societal norms, selection effects into employment and behavioural characteristics to be considered when analysing women’s wage returns.
Open Access
Does IEB make the grade? Alternative testing methods and educational outcomes: The case of the IEB in South Africa
(2019) Hill, Robert; Bhorat, Haroon
According to the Independent Examinations Board (IEB, 2015), students who write the IEB National Senior Certificate school-leaving exam are at a distinct advantage and seem to be better prepared for the pressures and challenges faced during their university years than are those students who wrote the Department of Basic Education (DBE) exams. Although the underlying curriculum is no different, the IEB exam is thought to be more challenging and to encourage more critical thinking and deeper engagement with the material than the DBE exam. Thus, this research paper aims to provide a rigorous investigation of whether those students who write the IEB exam at the end of their matric year achieve higher university grades in their first year of study, as well as a decomposition of this effect into a teaching effect and a testing effect. This is done by exploiting within-school variation of examination boards. Given that studies investigating independent school impacts on university performance have predominantly been conducted internationally (McNabb et al., 2002; Ogg et al., 2009; Smith & Naylor, 2001; Smith & Naylor, 2005), this paper will add to the literature in the South African context. By using the techniques of OLS, quantile regression, binary choice probit models and ordered probit models, this paper attempts to provide a holistic view of the effect that the IEB school-leaving examination has on a student’s academic performance at a tertiary level. The data used in this study is also unique, in that it is made up of an amalgamation of student record data obtained from the University of Cape Town (UCT), as well as governmental survey data. This paper finds that the IEB examination has a strong positive effect of between 1.6 and 6.5 percentage points on first-year GPA at UCT, particularly in the Medicine and Engineering faculties. Furthermore, this effect is present, but decreasing across the entirety of the performance distribution. Students with an IEB matric are significantly more likely to achieve a 2nd class pass or higher at the end of their first year of study than are comparable students from Former African schools. When decomposing the IEB effect into a teaching effect and a testing effect, it was found that the majority of the impact of the IEB comes simply from the different exam, and that teaching effects are minimal. A further finding of interest is that the IEB effect seems to be independent of resource availability, and that simply the exposure to the alternative testing method is sufficient for students to see significant improvements in their university performance. These results are robust to changes in functional form, and provide a strong and clear picture that perhaps South Africa should be adopting more of the IEB policies towards teaching and learning on a national scale.
Open Access
Economic Complexity and the Potential for Green Growth in South Africa
(2020) Wewege, Sarah Joy; Bhorat, Haroon
South Africa's reintegration into the global economy post-1994 has not produced the expected levels of industrialisation and growth-enhancing structural transformation that has traditionally been achieved by developed countries in the past. South Africa faces the triple challenge of poverty, inequality and unemployment and needs structural growth that is inclusive and sustainable. However, trying to emulate the traditional structural transformative growth paths that developed countries have followed previously, will prove unsuccessful due to changes in the global economy. This paper, therefore, argues that an alternate growth path is needed, especially given that global warming and the effects of climate change act as a threat multiplier to economic growth and development. Furthermore, the world economy is shifting away from fossil fuels and resource depletion towards greener technologies and products. South Africa needs to adopt a growth path that accounts for the current climate and global context to ensure sustainable and inclusive growth for future competitiveness. This paper, using the Economic Complexity Methodology, identifies green industries that South Africa is best positioned to develop and grow given the existing knowledge and capabilities within the economy. A case study is conducted on the wind-power industry which proves to be a promising option given South Africa's current economic climate and the potential for employment creation. This paper aims to highlight the opportunities for the development of green industries in South Africa and the limitations that hinder this potential.
Open Access
Education and labor market outcomes in South Africa: evidence from the National Income Dynamics Study
(2015) Kimani, Esther Mumbi; Bhorat, Haroon
Existing literature is in agreement on the importance of education in the determination of labor market outcomes. Using data from South Africa's National Income Dynamics Study, this thesis explores this relationship. It does this firstly, by examining the effect of school quality measured by school inputs-pupil-teacher ratio and expenditure per pupil-on educational attainment in South Africa. Following a reduced form production function approach, a partial generalized ordered probit is applied in the analysis. The thesis finds that both pupil-teacher ratio and expenditure per pupil have strong and significant effects on educational attainment of African South Africans. The ratio is more important at lower schooling levels, indicating a 'lagged effect' on educational attainment. A small increase in expenditure has large effects. This suggests declining returns to fiscal investment in education. Alternatively, it could indicate inefficiency in the use of funds, or compensatory funding of poor schools. Secondly, we examine the extent to which wage differences shown among district councils in South Africa can be explained by the magnitude of external returns to education. We use an augmented Mincerian regression to investigate this, considering the effect of district council share of college graduates on workers' wages. The study employs District Council's annual average climate to instrument for the share of district council college graduates. The results show that a 1% increase in a District Council's share of college graduates raises workers' wages by 5-8%. There are also spillovers effects, with college graduates being the beneficiaries. Thirdly, we estimate unemployment duration by gender and by competing risk, that is, exits into employment or economic inactivity. We use the Kaplan-Meier estimator and the Cox proportion hazard model in these estimations. The results from both estimators show factors that influence unemployment differ by exits, and their effects vary by gender. The hazard rates show that transition rate into employment is higher for men than for women with similar characteristics. They show that age and race significantly influence employers' choice between educated men and women. However, this bias is less obvious at higher levels of education.
Open Access
Employment and labour market trends
(HSRC Press, 2003) McCord, Anna; Bhorat, Haroon
Open Access
Employment Outcomes and Returns to Earnings in Post-Apartheid South Africa
(2012-12) Bhorat, Haroon; Mayet, Natasha
This paper attempts to understand some of the key drivers of employment and earnings trends within the South African labour market in the 15 years following the demise of apartheid. A number of factors are discussed which feature in the understanding of South Africaâ€™s labour market dynamics in general, and its high unemployment levels in particular.
Open Access
Employment, Wages and Skills Development: Firm-Specific Effects - Evidence from Two Firm Surveys in South Africa
(2002-06) Bhorat, Haroon; Lundall, Paul
The paper explores the inter and intra firm dynamics that are instrumental in shaping the determination of skills training within the South African labour market. The essential starting point is to show that the size of the enterprise and nature of the economic sector in which these enterprises operate, sets conditions on the regimes of enterprise training and skills development.
Open Access
Estimates for Poverty Alleviation in South Africa, with an Application to a Universal Income Grant
(2003-04) Bhorat, Haroon
Through the use of the standard tools of poverty analysis, this paper attempts to firstly measure the minimum financial contribution required from the state to eliminate poverty in the society. Secondly, we measure the absolute and relative household poverty impact of instituting a universal income grant, set at different monthly values.
Open Access
Estimating a poverty line: An application to free basic municipal services in South Africa
(2011-10) Bhorat, Haroon; Oosthuizen, Morne; van der Westhuizen, Carlene
One of the key interventions aimed at improving the welfare of South African households has been local government's provision of a package of free basic services (FBS) to poor households. It is, however, not completely clear how different municipalities identify households which are eligible for FBS. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 per month.
Open Access
Estimating the Causal Effect of Enforcement on Minimum Wage Compliance : The Case of South Africa
(2011-12) Bhorat, Haroon; Kanbur, Ravi; Mayet, Natasha
This paper attempts to estimate the causal effect of government enforcement on compliance with minimum wages in South Africa, a country where considerable non-compliance exists. The number of labour inspectors per capita is used as a proxy for enforcement, whilst non-compliance is measured using an index of violation that measures both the proportion of individuals violated, as well as the average depth of individual violation.
Open Access
Estimating the Impact of Minimum Wages on Employment, Wages and Non-wage Benefits: The Case of Agriculture in South Africa
(2012-07) Bhorat, Haroon; Kanbur, Ravi; Stanwix, Benjamin
Assessments of the impact of minimum wages on labour market outcomes in Africa are relatively rare. In part this is because the data available do not permit adequate treatment of econometric issues that arise in such an assessment. This paper attempts to estimate the impact of the introduction of a minimum wage law within the Agriculture sector in South Africa, based on 15 waves of the biannual Labour Force Survey (LFS), starting in September 2000 and ending in September 2007.