scholarly journals Declining labour share of income in South Africa: the Kalman filter approach

2015 ◽  
Vol 8 (2) ◽  
pp. 372-391
Author(s):  
Irrshad Kaseeram ◽  
Darma Mahadea
Keyword(s):  
Kalman Filter ◽  
Labour Market ◽  
South African ◽  
Emerging Market ◽  
National Income ◽  
Absorption Capacity ◽  
Relative Distribution ◽  
The South ◽  
Labour Share ◽  
Long Run

Recent research has shown that in both developed and emerging market economies, the labour share of national income has exhibited a declining trend since the 1980s. Research investigating the problem of high unemployment in the South African economy has inferred that this problem arises partly because of past and current socio-political conditions, low rates of economic growth, labour market rigidities, globalisation and institutional arrangements. As the labour absorption capacity is rather low, many people are unable to earn an income from an engagement in the formal labour market. This is likely to have implications for the relative distribution share of labour and capital in the country’s national income. However, no recent published research has investigated this phenomenon in the South African context. Thus, this paper attempts to shed some light on the problem. Using yearly data from 1946 to 2013, the study employs the Kalman filter methodology within the standard Cobb-Douglas production function framework to investigate how labour and capital shares as well as total factor productivity have been behaving in this period. The results indicate that the share of total income going to labour has decreased over the long run, while that of capital has increased. Specifically, the share of capital increased from 3.1% in 1980 to 12% in 2013, while that of labour decreased from 91% to 83%. This reflects a rising income inequality and concentration of wealth, with output and income generation shifting to technological- or capital -intensive production requiring more skilled labour, a trend also observed in certain other countries.

Revisiting Poverty, Human Development and Inequality in Democratic South Africa

2021 ◽  
pp. 097370302110329
Author(s):  
Vusi Gumede
Keyword(s):  
South Africa ◽  
Human Development ◽  
South African ◽  
Measurement Techniques ◽  
National Income ◽  
Population Group ◽  
Poverty Dynamics ◽  
The South ◽  
South African Society ◽  
Multidimensional Poverty Index

There are many questions related to poverty in South Africa that remain unsatisfactorily answered. Given the poor performance of the South African economy, including declining per capita incomes and increasing unemployment, since 2010 or so, it is important to examine poverty dynamics in the recent years. Many recent studies in this regard have relied on 2015 data, and do not examine all the three interrelated aspects of wellbeing viz. poverty, human development and inequality. In this context, this paper uses all the five waves of the National Income Dynamics Study and employs different poverty and inequality measurement techniques to investigate poverty dynamics, human development and inequality during the post-apartheid period in South Africa. The estimates suggest that although poverty was declining prior to the coronavirus pandemic, the African/Black population group is the most affected by poverty. The phenomenon of feminisation of poverty is also verified based on the evidence of increasingly more women in poverty than men. The proportion of population experiencing multiple deprivations, measured by the Multidimensional Poverty Index, have not changed in the post-apartheid period. Similarly, human development has not improved during this period. South African society continues to be one of the most unequal societies in the world. The paper argues that the inability to sufficiently reduce poverty, unemployment and inequality results from the weak performance of the South African economy. In the same vein, it is the structure of the South African economy that has kept the levels of human development low and income inequality high.

scholarly journals Analysis of the Keynesian Theory of Employment and Sectoral Job Creation: The Case of the South African Manufacturing Sector

2018 ◽  
Vol 18 (1) ◽  
pp. 123-143
Author(s):  
Thomas Habanabakize ◽  
Paul-Francois Muzindutsi
Keyword(s):  
South African ◽  
Manufacturing Sector ◽  
Job Creation ◽  
The South ◽  
Economic Sectors ◽  
Vector Autoregressive ◽  
Integration Approach ◽  
Long Run ◽  
Short Run ◽  
Investment Spending

Abstract The manufacturing sector is one of the backbones of the South African economy, and yet is one of the economic sectors facing challenges in job creation. This study analysed the long-run and short-run effects of aggregate expenditure components on job creation in the South African manufacturing sector. A Vector Autoregressive (VAR) with Johansen co-integration approach was used to analyse quarterly data from 1994 to 2015. The findings are that there is a long-run relationship between aggregate expenditure and job creation in the South African manufacturing sector, with government and investment spending being the major components of aggregate expenditure that create jobs in the South African manufacturing sector. Conversely, consumption spending destroys jobs in the manufacturing sector, while net exports have no significant effect on job creation. The short-run relationship between variables was not significant. Recommendations are that more effort should be put into investment spending, and government should spend more on investment than on consumption spending - in order to increase job creation in the manufacturing sector.

scholarly journals ’n Teologies-etiese beoordeling van regstellende aksie

2007 ◽  
Vol 41 (1) ◽  
Author(s):  
E. J. De Beer
Keyword(s):  
Affirmative Action ◽  
Labour Market ◽  
South African ◽  
Ethical Judgment ◽  
The South ◽  
Current Application ◽  
Before And After ◽  
Biblical Principles

A theological ethical judgment of affirmative action In the period directly before and after 1994 much consideration was given to the position of the South African labour market. It was clear that some form of affirmative action had to be instituted. In this article different ways in which affirmative action has been applied since 1994 are studied, as well as the effects thereof. Affirmative action has made it possible for many workers to occupy positions that they otherwise would not have received. Other workers have been negatively affected by affirmative action. How should this be judged? In this article a number of Biblical principles regarding labour are posed. The current application of affirmative action is judged against these principles.

scholarly journals Recent internal migration and labour market outcomes: Exploring the 2008 and 2010 national income dynamics study (NIDS) panel data in South Africa

2014 ◽  
Vol 17 (5) ◽  
pp. 653-672 ◽  
Author(s):  
Nhlanhla Cyril Mbatha ◽  
Joan Roodt
Keyword(s):  
Labour Market ◽  
South African ◽  
Urban Areas ◽  
National Income ◽  
National Development ◽  
Labour Markets ◽  
Positive Outcomes ◽  
Income Dynamics ◽  
Informal Labour ◽  
The Unemployed

We began with the premise that South African recent migrants from rural to urban areas experience relatively lower rates of participation in formal labour markets compared to local residents in urban communities, and that these migrants are overrepresented in the informal labour market and in the unemployment sector. This means that rural to urban migrants are less likely than locals to be found in formal employment and more likely to be found in informal employment and among the unemployed. Using perspectives from Development Economics we explore the South African National Income Dynamics Study (NIDS) panel datasets of 2008 and 2010, which only provide a perspective on what has happened between 2008 and 2010. We find that while migrants in general experience positive outcomes in informal labour markets, they also experience positive outcomes in formal markets, which is contrary to expectations. We also find that there are strong links between other indicators of performance in the labour market. Earned incomes are closely associated with migration decisions and educational qualifications (e.g. a matric certificate) for respondents between the ages of 30 and 60 years. The youth (15 to 30 years old) and senior respondents (over the age of 60) are the most disadvantaged in the labour market. The disadvantage is further reflected in lower earned incomes. This is the case even though the youth are most likely to migrate. We conclude that migration is motivated by both push (to seek employment) and pull (existing networks or marriage at destination) factors. For public policy, the emerging patterns – indicative and established – are important for informing strategies aimed at creating employment and developing skills for the unemployed, migrants and especially the youth. Similar policy strategies are embodied in the National Development Plan (NDP), the National Skills Development Strategy (NSDS), etc.

An analysis of cost of capital, capital structure and capital budgeting practices: a survey of South African listed companies

2008 ◽  
Vol 16 (2) ◽  
pp. 31-52 ◽  
Author(s):  
C. Correia ◽  
P. Cramer
Keyword(s):  
Capital Structure ◽  
South African ◽  
Cost Of Capital ◽  
Emerging Market ◽  
Capital Budgeting ◽  
Listed Companies ◽  
Sample Survey ◽  
The South ◽  
Equity Ratio ◽  
Finance Theory

This study employs a sample survey to determine and analyse the corporate finance practices of South African listed companies in relation to cost of capital, capital structure and capital budgeting decisions.The results of the survey are mostly in line with financial theory and are generally consistent with a number of other studies. This study finds that companies always or almost always employ DCF methods such as NPV and IRR to evaluate projects. Companies almost always use CAPM to determine the cost of equity and most companies employ either a strict or flexible target debt‐equity ratio. Furthermore, most practices of the South African corporate sector are in line with practices employed by US companies. This reflects the relatively highly developed state of the South African economy which belies its status as an emerging market. However, the survey has also brought to the fore a number of puzzling results which may indicate some gaps in the application of finance theory. There is limited use of relatively new developments such as real options, APV, EVA and Monte Carlo simulation. Furthermore, the low target debt‐equity ratios reflected the exceptionally low use of debt by South African companies.

scholarly journals The Impact of Productivity, Investment and Real Wages on Employment Absorption Rate in South Africa

2019 ◽  
Vol 8 (12) ◽  
pp. 330 ◽  
Author(s):  
Thomas Habanabakize ◽  
Daniel Francois Meyer ◽  
Judit Oláh
Keyword(s):  
South Africa ◽  
South African ◽  
Absorption Rate ◽  
Labour Productivity ◽  
Series Data ◽  
The South ◽  
Real Wages ◽  
Long Run ◽  
Investment Spending ◽  
The Impact

Many developing countries are facing high levels of unemployment and most people who are employed are poorly remunerated due to low skills and productivity levels. Although jobs are important, a productive job is even more important, not only for employees, but also for employers. South Africa, being a developing country, is also facing the challenge of dramatically high levels of unemployment. This study’s aim was to examine both the short- and long-term impacts of real wages, labour productivity and investment spending on employment absorption rates in South Africa. To establish the existing relationship between variables, the study applied several econometric approaches, such as an autoregressive distributed lag (ARDL) model, error correction model (ECM) and a Toda–Yamamoto causality analysis on quarterly time series data from 1995Q1 to 2019Q1. The results revealed the existence of both short- and long-run relationships among the variables. While a positive relationship was found between employment absorption, investment spending and labour productivity, it was found that real wages negatively impact on long-run employment absorption rates. Additionally, the short-run analysis indicated that the lagged employment absorption rate influences the current rate of employment. Furthermore, the causality tests indicated that a bi-directional causal relationship exists between employment absorption and investment spending; and a uni-directional relationship between employment and both real wages and labour productivity. Based on the findings, the study recommends increments of investment spending and labour productivity that enables the South African economy to carry out more activities that would require more workers, thereby improving the employment absorption rate. The fact that labour productivity positively impacts the employment absorption rate infers the requirement for quality and skilled workers to be absorbed in the South African labour market. Therefore, labour skills improvements appear to be a prerequisite for productivity enhancement and job creation.

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