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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:A decomposition of real wage growth for South African manufacturing by size class: 1972-1996
Authors:Mazumdar, DipakISNI
Van Seventer, Dirk ErnstISNI
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:wage differentials
small enterprises
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2004.tb00106.x/pdf
Abstract:The SME (small and medium enterprises) sector in South Africa is seen as one that has the ability to absorb relatively more labour per unit of output than large-scale enterprises. One possible reason for the relatively higher labour absorption in the SME sector is that it pays relatively lower wages per worker. In order to investigate whether this is indeed the case and whether this has resulted in a relatively better performance by the SME sector in manufacturing, the authors present data which offer a breakdown of key economic variables (value added, employment, wage bill, etc.) in the manufacturing sector by four size groups of enterprises: small, medium, large and very large. The data are presented for four points in time spread over the period 1971-1996. The authors use a decomposition model to investigate the trade-off between employment and wage growth developed by D. Mazumdar (2000). The results show that SMEs have made a positive contribution to real wage growth, while increasing their demand for labour at the same time. These achievements have been the result of phenomenal output increases. Policymakers should therefore focus on supply-side constraints facing SMEs rather than the labour market. Bibliogr., note. [ASC Leiden abstract]