Immigrant Special Visas and Local Employment: evidence from South African metropoles

Valentine Madzudzo (), Dieter von Fintel () and Mamello Nchake ()
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Valentine Madzudzo: University of Stellenbosch
Dieter von Fintel: Stellenbosch University
Mamello Nchake: Stellenbosch University

No 170, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: This paper sought to investigate why immigrant special permits can have different impacts on the local employment outcomes in locations within the same country. The paper specifically investigated the association between the Zimbabwe Exemption Permit (ZEP) and local employment outcomes and formalization of foreign labour in Cape Town and eThekwini, cities in South Africa that have different industrial specializations and labour demand. Bivariate maps and the event study model were used to investigate whether the increase in the foreign employment share was at the expense of local employment and whether the ZEP reinforced old spatial structures or new patterns emerged to suggest the formalization of foreign labour. The Ordinary Least Squares (OLS) interaction model was used to investigate the association between foreign employment and local employment in the CBD and along transport corridors as well as changes to the local person living at the average distance from the CBD and the main transport corridors. The results show that ZEP was associated with formalization of labour and a lot of complementarities between local and foreign labour in eThekwini and Cape Town, although in Cape Town, local labour lost jobs to immigrants in the CBD in 2018.

Keywords: Zimbabwe Exemption Permit; Local Employment, Foreign Employment, Bivariate maps, Difference-in-Differences, Ordinary Least Squares; Cape Town; eThekwini, South Africa (search for similar items in EconPapers)
JEL-codes: J61 R23 (search for similar items in EconPapers)
Date: 2025-08
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Published in ERSA Working Paper Series, August 2025

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