Estimating the impact of minimum wages on employment, wages and non-wage benefits: the case of agriculture in South Africa

Estimating the impact of minimum wages on employment, wages and non-wage benefits: the case of agriculture in South Africa

Assessments of the impact of minimum wages on labour market outcomes in Africa are relatively rare. In part this is because the data available do not permit adequate treatment of econometric issues that arise in such an assessment. This paper attempts to estimate the impact of the introduction of a minimum wage law within the agriculture sector in South Africa, based on 15 waves of the biannual Labour Force Survey (LFS), between 2000 and 2007. The chosen sample includes six waves before the legislations effective date (March 2003) and nine afterwards. The research results suggest a significant reduction in employment in agriculture from the minimum wage, an increase in wages on average, no significant change in hours worked and a sharp rise in non-wage compliance.

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