Central Data Catalog

Citation Information

Type Working Paper - University of California, Berkeley
Title High unemployment yet few small firms: The role of centralized bargaining in South Africa
Author(s)
Publication (Day/Month/Year) 2009
Page numbers 1-48
URL http://are.berkeley.edu/~jmagruder/bcunion.pdf
Abstract
South Africa has very high unemployment, yet few adults work informally in small firms. One explanation is that unions extend arbitration decisions to non-unionized firms, raising wages. These agreements are enforced in a spatially discontinuous way; employment effects of these bargaining councils are identi?ed through spatial fixed effects. This approach represents a methodological improvement over sample restrictions used in other spatial discontinuity studies. Bargaining councils are found to decrease employment by 6-11%, with larger decreases among small Firms. These effects are not explained by resettlement to uncovered areas, and are robust to a wide variety of forms for average spatial heterogeneity.

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