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

Taryn Dinkelman and Vimal Ranchhod

Journal of Development Economics, 2012, vol. 99, issue 1, 27-45

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 for domestic workers and no statistically significant effects on employment on the intensive or extensive margins. 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 strong 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.

Keywords: Minimum wage; Informal sector; Domestic workers; Africa (search for similar items in EconPapers)
JEL-codes: J08 J48 O15 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (68)

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Related works:
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)
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:eee:deveco:v:99:y:2012:i:1:p:27-45

DOI: 10.1016/j.jdeveco.2011.12.006

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