High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa

Jeremy Magruder

American Economic Journal: Applied Economics, 2012, vol. 4, issue 3, 138-66

Abstract: South Africa has very high unemployment, yet few adults work informally in small firms. This paper tests whether centralized bargaining, by which unionized large firms extend arbitration agreements to nonunionized smaller firms, contributes to this problem. While local labor market characteristics influence the location of these agreements, their coverage is spatially discontinuous, allowing identification by spatial regression discontinuity. Centralized bargaining agreements are found to decrease employment in an industry by 8-13 percent, with losses concentrated among small firms. These effects are not explained by resettlement to uncovered areas, and are robust to a wide variety of controls for unobserved heterogeneity. (JEL J52, K31, L25, O14, O15)

JEL-codes: J52 K31 L25 O14 O15 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/app.4.3.138
References: Add references at CitEc
Citations: View citations in EconPapers (95)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.138 (application/pdf)
http://www.aeaweb.org/aej/app/data/2011-0027_data.zip (application/zip)
http://www.aeaweb.org/aej/app/app/2011-0027_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:aejapp:v:4:y:2012:i:3:p:138-66

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().