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American Economic Journal: Applied Economics: Vol. 4 No. 3 (July 2012)
AEJ: Applied Volume. 4, Issue 3 | 
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AEJ: Applied Forthcoming Articles
High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa
Article Citation
Magruder, Jeremy R. 2012. "High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa."
American Economic Journal: Applied Economics,
4(3): 138-66.
DOI: 10.1257/app.4.3.138
DOI: 10.1257/app.4.3.138
Abstract
South Africa has very high unemployment, yet few adults work informally in small firms. This paper tests whether centralized bargaining,
by which unionized large firms extend arbitration agreements to nonunionized smaller firms, contributes to this problem. While local labor market characteristics influence the location of these agreements, their coverage is spatially discontinuous, allowing identification by spatial regression discontinuity. Centralized bargaining
agreements are found to decrease employment in an industry by 8-13 percent, with losses concentrated among small firms. These effects are not explained by resettlement to uncovered areas, and are robust to a wide variety of controls for unobserved heterogeneity. (JEL J52, K31, L25, O14, O15)
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (9.69 MB) | Online Appendix (2.95 MB)
Authors
Magruder, Jeremy R. (U CA, Berkeley)
JEL Classifications
J52: Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
K31: Labor Law
L25: Firm Performance: Size, Diversification, and Scope
O14: Industrialization; Manufacturing and Service Industries; Choice of Technology
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration
K31: Labor Law
L25: Firm Performance: Size, Diversification, and Scope
O14: Industrialization; Manufacturing and Service Industries; Choice of Technology
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration
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