Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa

Taryn Dinkelman and Vimal Ranchhod

No 44, SALDRU Working Papers from Southern Africa Labour and Development Research Unit, University of Cape Town

Abstract: What happens when a previously uncovered labor market is regulated? We exploit the introduction of a minimum wage in South Africa and variation in the intensity of this law to identify increases in wages and formal contract coverage, and no significant effects on employment on the intensive or extensive margins for domestic workers. These large, partial responses to the law are somewhat surprising, given the lack of monitoring and enforcement in this informal sector. We interpret these changes as evidence that external sanctions are not necessary for new labor legislation to have a significant impact on informal sectors of developing countries, at least in the short-run.

Date: 2010-07
New Economics Papers: this item is included in nep-afr, nep-dev and nep-lab
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Related works:
Journal Article: Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa (2012)
Working Paper: Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa (2011)
Working Paper: Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ldr:wpaper:44

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