Wage inequality, firm characteristics, and firm wage premia in South Africa

Shakeba Foster

No wp-2023-131, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper investigates the role of firm characteristics in driving wage inequality and firm wage premia in the South African labour market. The Abowd, Kramarz, and Margolis (AKM) and Kline, Saggio, and Sølvsten (KSS) regression-based decomposition methods are applied to matched employer-employee administrative tax data for the period 2011-19. Additionally, the Theil index is used as a comparative tool for estimating wage inequality, given that the variance of logarithms applied in the regression-based decomposition methods has been established as an imprecise measure of inequality.

Keywords: Wage inequality; Wage premium; Firm-level analysis; South Africa; Firms (search for similar items in EconPapers)
Date: 2023
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