Working Paper

2015-05-28

University of Cape Town

We analyse the long‐term trends in wages in South Africa, using the data from the October Household Surveys, Labour Force Surveys and Quarterly Labour Force Surveys. We show that outliers and missing data need to be taken into consideration when working with these data. Our results show that overall mean real earnings among employees has risen over this period. Median real earnings, by contrast, have lagged. We show that the top end of the earnings distribution has moved away from the median, while there seems to have been a relative compression of the distribution right at the bottom.

This paper draws on and extends work reported on in two working papers, Wittenberg and Pirouz (2013) and Wittenberg (2014). Some of the original data work was done with the support of an infrastructure grant to DataFirst from the Redi3x3 project on “Employment/Unemployment, Income Distribution and Inclusive Growthʺ. The Vice‐Chancellor’s Strategic Fund of the University of Cape Town paid for the initial construction of the PALMS dataset without which this research would not have been possible. The ILO commissioned some of the initial analyses of wage trends, which are reported in Wittenberg (2014). I would like to acknowledge the helpful comments and support from Patrick Belser and Kristen Sobeck in that work.