Separating employment effects into job destruction and job creation: Evidence from a large minimum wage increase in the agricultural sector using administrative tax data

Marlies Piek, Dieter von Fintel and Johann Kirsten

No wp-2020-51, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper presents new evidence on the employment effects of a large increase in agricultural minimum wages in South Africa using anonymized tax data. We add to the minimum wage literature by differentiating employment effects resulting from the destruction of existing jobs and from the slower creation of new jobs. Using data from tax years 2010/11 to 2016/17 and difference-in-difference models, our results show that employment decreased by approximately 14 percentage points following the minimum wage increase.

Keywords: Minimum wage; Employment effects; Non-compliance; Job destruction; Job creation; Employment (search for similar items in EconPapers)
Date: 2020
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