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Magruder, Jeremy R. 2012. "High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa."
,
4(3): 138-66.
Show Article Details
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)
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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
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