THE DETERMINANTS OF MINIMUM WAGE VIOLATION IN SOUTH AFRICA

Haroon Bhorat, Ravi Kanbur and Natasha Mayet

No 126535, Working Papers from Cornell University, Department of Applied Economics and Management

Abstract: This paper investigates the determinants of non-compliance or violation of minimum wage legislation in South Africa, a country where violation is high, at just under 50 percent. The number of labour inspectors per capita is used as a proxy for enforcement, whilst non-compliance is measured using an index of violation that measures both the proportion of individuals violated, as well as the depth of violation of an individual. Due to the potential simultaneity between enforcement and compliance, the number of labour inspectors is instrumented by the number of non-inspectors. The results suggest that there are a variety of factors impacting on violation, including firm-level, sectoral and spatial characteristics. One of the key determinants of violation is found to be the local unemployment rate.

Keywords: Labor and Human Capital; Public Economics (search for similar items in EconPapers)
Pages: 29
Date: 2011
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:cudawp:126535

DOI: 10.22004/ag.econ.126535

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