Ebook How Did Labour Market Racial Discrimination Evolve After The End Of Apartheid?
In 1994, the onset of democracy in South Africa formally ended several decades of discriminatory policies and legislation, which deeply affected the structure and the efficiency of the labour market. Hence, the legacy of apartheid is reflected by large racial inequalities in the access to the labour market in addition to a wellestablished racial occupational and wage hierarchy.
Differences in human capital investment, as well as in other individual attributes, play a great role in explaining the varying incidence of unemployment across racial groups, the relatively small proportion of African workers in high-skilled jobs and their lower earnings. Furthermore, the continuance of discriminatory employers’ behaviour, whether it is voluntary or not, is likely to reinforce these individual differences in productivity. As the fight against racial discrimination became a key aim of the new government’s policy and legislation, it is worth investigating the degree of discriminatory labour practices and their development in the second half of the 90’s.
First, this paper seeks to estimate the extent of racial hiring, occupational and earnings discrimination in the late 90s. The preliminary step is thus to identify the determinants of the labour market outcomes of interest, namely the probability of employment, the occupational attainment, and the earnings. The following stage is to explore the extent to which the race gaps respectively observed in the probability of getting a job, of reaching a high-skilled occupation and in average earnings are due to African group’s inferior productive characteristics and to labour market discrimination. The paper is based on econometric estimates that adapt, whenever it is necessary, the residual difference method of decomposing group wage differences (Oaxaca, 1973) to discrete choice models. It focuses on two population groups, African and White males.
The second aim of the paper is to analyse how these three forms of discrimination evolved after the end of apartheid. For this purpose, we use two household surveys, namely the 1993 Project for Statistics on Living Standards and Development (PSLSD) and the 1999 October Household Survey (OHS). In doing so, this paper expands the field of investigation and the period covered by previous studies focusing only on racial wage discrimination (Knight and McGrath, 1987, Moll, 1991 and 2000, Allanson et al, 2001) or on employment discrimination (Kingdon and Knight,
2000).
The analysis below proceeds as follows. Section 2 outlines the methodology used in the remainder of the paper. Section 3 investigates the extent of racial discrimination in labour force participation. It first estimates the determinants of employment and then concentrates on the measurement and evaluation of discrimination between 1993 and 1999. Similarly, sections 4 and 5 consider occupational and earnings discrimination respectively. Conclusions are drawn in section 6.
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