Determinants of the demand for regular farm labour in South Africa, 1960-2002

G.N. Sparrow, Gerald F. Ortmann, Michael C. Lyne and Mark A.G. Darroch

Agrekon, 2008, vol. 47, issue 01, 24

Abstract: This paper estimates long-run price (wage) elasticities of demand for regular farm labour in South Africa using both Ordinary Least Squares (OLS) regression and a Two-stage Least Squares (2SLS) simultaneous-equation model for the period 1960-2002. Both models include a piecewise interactive slope dummy variable with 1991 as the threshold year to reflect South African (SA) commercial farmers’ expectations that farm labour costs would increase as new labour legislation was introduced from the early 1990s onwards. The long-run price (wage) elasticity of demand for regular farm labour in South Africa during 1960-1990 was estimated as -0.25 for OLS and -0.23 for 2SLS regression, respectively. For the period 1991-2002, this elasticity estimate rose to -1.32 and -1.34 for OLS and 2SLS regression, respectively. These results suggest that a marked structural decline in the demand for regular labour has occurred since 1991 that raises questions about the appropriateness of labour laws and minimum wage legislation that have increased the cost of regular farm labour in South Africa.

Keywords: Farm Management; Labor and Human Capital (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ageconsearch.umn.edu/record/6777/files/47010052.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:6777

DOI: 10.22004/ag.econ.6777

Access Statistics for this article

More articles in Agrekon from Agricultural Economics Association of South Africa (AEASA) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().