Industry structure and labor market flexibility in the South African manufacturing sector: A time series and panel data approach

Johannes W. Fedderke, Andrew J. Hill

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

This paper presents a joint analysis of labor market flexibility and product market structure. Our investigation confirms earlier results of imperfect competition in South African manufacturing where we find an average mark-up of 50% for the period 1970 to 2004 that is without consistent trend over time. The contribution of the paper is to provide a theoretically grounded means of linking output market conduct to labor market flexibility. We infer the proportion of labor associated with rigidities in the labor market from the mark-up, and find that two thirds of total labor employed in South African manufacturing is associated with rigidities. We find that this proportion falls during the 1980s and rises during the 1990s, suggesting an increase in labor flexibility followed by a decrease.

Original languageEnglish (US)
Pages (from-to)1291-1302
Number of pages12
JournalEconomic Modelling
Volume28
Issue number3
DOIs
StatePublished - May 1 2011

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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