Does a Child Penalty Exist in the Post-apartheid South African Labour Market?

Magadla, Sibahle Siphokazi Sinalo

Does a Child Penalty Exist in the Post-apartheid South African Labour Market?

Master Thesis

2018

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

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.

Keywords

Economics

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