Real wages, employment and macroeconomic policy in a structuralist model for South Africa
Year: 2000
Type: article
Abstract: It is now commonplace to argue that in South Africa, like many developing countries, higher wages will lower employment. This paper shows that it is difficult to extricate the relationship between wages, employment and output from the macropolicy environment. Dynamic computable general equilibrium simulations show that the employment effects of nominal wage increases depends on induced monetary and fiscal policy when there is monetary 'policy dominance'. While wage-led growth is inefficient, increasing the wages of unskilled workers can improve the distribution of income, when the induced changes are neutralised.
Source: Journal of African Economies
DOI: 10.1093/jae/9.4.512
Author: B Gibson
Institution: University of Vermont
Language: English
Topic: Economic Theory and Policy
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1966851075