The effects of the Employment Tax Incentive on South African employment

Ebrahim, Amina; Leibbrandt, Murray; Ranchhod, Vimal

doi:10.35188/unu-wider/2017/229-8

Cited by 38 publications

(31 citation statements)

References 12 publications

(20 reference statements)

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“…Kerr (2018) uses this dataset in studying job churn over the period2011-14, andEbrahim et al (2017) assess the impact of the Earnings Tax Incentive, a youth wage subsidy recently implemented in South Africa.…”

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confidence: 99%

The wage-setting power of firms: Rent-sharing and monopsony in South Africa

Bassier¹

2019

WIDER Working Paper

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.Abstract: Using administrative tax records from South Africa for the period 2011-14, I find that firm wage premia explain 25 per cent of the total wage variance, 60 per cent of the gender wage gap, and 40 per cent of the gap between workers in the middle and the bottom of the income distribution. Next, I argue that in contrast to the rent-sharing literature, many studies of monopsony fail to use firm-level wage variation. I address this by using the estimated firm wage premia to estimate how wages are related to rent-sharing and monopsony power. I find that the average worker switching from a firm in the 25th percentile to the 75th percentile in profitability is paid 32 per cent more; and that the same switch across the distribution of monopsony, as measured by the Herfindahl-Hirschman Index in industry-by-local labour market hires, decreases wages by 10 per cent on average. When monopsony is measured using a separations approach, I find a labour supply elasticity of 0.75, suggesting substantial wage-setting power. Finally, I provide additional evidence supporting the applicability of the monopsony model in explaining these results. Differences in labour supply elasticities across gender and income groups account remarkably well for the corresponding average gaps in firm wage premia, and unions substantially increase rent-sharing in firms.

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confidence: 99%

The wage-setting power of firms: Rent-sharing and monopsony in South Africa

Bassier¹

2019

WIDER Working Paper

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“…Ebrahim et al . () do find a statistically significant effect on youth employment in firms with fewer than 200 employees. Makgetla () finds that firms who use the incentive are typically large and faster growing.…”

Section: New Evidencementioning

confidence: 82%

“…Ebrahim et al . () and Makgetla () both employ the SARS administrative tax record data, but use different approaches, to examine the ETI.…”

Section: New Evidencementioning

confidence: 99%

New Data, New Approaches and New Evidence: A Policy Synthesis

Arndt¹

2018

South African J Economics

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The Republic of South Africa faces the imperative of escaping economic stagnation. This article seeks to synthesise results from a series of research efforts, including but not limited to the articles presented in this special issue, and consider policy options for escaping economic stagnation. The focus is on South Africa and South African policies yielding relatively quick dividends in terms of growth and taking the rest of the world as given. Four broad implications are presented. These could form part of a concerted effort to escape from South Africa's long running economic malaise. JEL Classification: O11, D24, F16, F22

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“…It is important to note that they estimate the effect of being eligible, in other words the intention to treat effect rather than the treatment impact on the treated. Ebrahim et. al.…”

Section: Personal Income Taxmentioning

confidence: 99%