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The General Equilibrium Effects of a Productivity Increase on the Economy and Gender in South Africa

Godbertha Kinyondo () and Margaret Mabugu
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Godbertha Kinyondo: Department of Economics, University of Pretoria

No 200801, Working Papers from University of Pretoria, Department of Economics

Abstract: This study utilises a computable general equilibrium (CGE) model to examine the effects of economy-wide (SIM 1) and partial (SIM 2) productivity increases on the economy, gender employment, wages, income and welfare in South Africa. The model has 49 sectors, 14 household categories, and 2 primary inputs. SIM 1 results in ‘output’ led employment demand and increased earnings for all skill types of men and women. Skilled men benefits more than others in most sectors. Under SIM 2, productivity has negative employment impact of all skills mostly in labour-intensive sectors. Some displaced labour relocates to expanded export-orientation and service sectors resulting in increased economy-wide jobs and earnings. Unskilled women earnings, however, decline because they are concentrated in low-paying positions. In addition, productivity improves household’s welfare due to reduced commodity prices and improved earnings.

Keywords: CGE; FDI; South Africa; Gender; Productivity (search for similar items in EconPapers)
JEL-codes: D24 F11 F14 F21 J16 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-02
New Economics Papers: this item is included in nep-afr, nep-cmp, nep-dev and nep-lab
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