Skip to main content
Article thumbnail
Location of Repository

Trade liberalisation and labour demand within South African manufacturing firms

By Lawrence Edwards and Alberto Behar


Using new detailed tariff data, wages disaggregated by skill level and firm level information, this paper ascertains the relationships between trade, technology and labour demand and investigates the effects of tariff changes on factor prices in South African manufacturing. We find evidence that trade liberalization and technological change have affected the skill structure of employment. Export orientation, raw materials imports, training, investment in computers and firm age are positively associated with the skill intensity of production. We also find that tariff liberalisation raised the return to capital relative to labour, but that the negative impact on labour is concentrated on semi-skilled workers. Tariff liberalisation mandated a rise in real returns to unskilled workers.

OAI identifier:

Suggested articles


  1. A (2004): “Estimates of labour demand elasticities and elasticities of substitution using firm-level manufacturing data”, CSSR Working Paper no. 98. Cape Town:
  2. (1997). A review of South Africa’s trade policy”, paper presented at the Trade and Industrial Policy Annual Forum,
  3. (1994). Changes in the demand for skilled labor within U.S. manufacturing: Evidence from the annual survey of manufactures”,
  4. (2002). Employment, wages and skills development: firm specifice ffects - evidence from two firm surveys
  5. (2001). F e d d e r k e ,J ,K a y e m b a ,J ,H e n d e r s o n ,S ,M a r i o t t i ,Ma n dV a z e ,P
  6. (2003). Firm level analysis of trade, technology and employment in South Africa”,
  7. (1997). Foreign trade and employment in South African manufacturing industry”,
  8. (1998). Globalisation, employment and labour market institutions in South Africa”, South African Network for Economic Research Working Paper no. 14.Trade liberalisation 20 Nattrass,
  9. (1996). Growth, employment and redistribution: A macroeconomic strategy, Pretoria: South African government.
  10. (1995). Harrison A
  11. (1977). Homothetic and Non-Homothetic CES Production Functions”,
  12. (1996). In search of the Stolper Samuelson effects on U.S. wages”,
  13. (2001). Labour demand and trade in South Africa: A dynamic panel analysis”, paper presented atTrade liberalisation 18 the Annual Conference on Econometric Modelling for Africa,
  14. (1997). Learning by trading and the returns to human capital in developing countries”, The World Bank Economic Review 11(1).
  15. (1994). North South Trade, Employment and Inequality, Oxford: Oxford University Press.Trade liberalisation 21 Wood, A
  16. (2000). Real wages and the demand for skilled and unskilled male labour in Ghana’s manufacturing sector: 1991-1995”,
  17. (1996). Restructuring the labour market, Geneva: International Labour Organisation.
  18. (1978). Short-run capital specificity and the pure theory of international trade”,
  19. (1993). South Africa: A review of trade policies. World Bank Informal Discussion Papers on Aspects of the South African Economy no. 4”, Washington DC: The World Bank Southern Africa Department.
  20. (1996). South African manufacturing industries - Catching up or falling behind?”
  21. (2004). South African Standardised Industry Database, Quantec Research. Available from
  22. (1999). The impact of outsourcing and high-technology capital on labor: Estimates for the United States, 1979-90”,
  23. (2001). The nature of South Africa’s trade patterns by economic sector, and the extent of trade liberalisation during the course of the 1990’s”,
  24. (1992). The Structure and Incidence of Protection in S o u t hA f r i c a ” ,i nB l a c k ,Pa n dBD o l l e r y( e d s ) ,Leading Issues in South African Microeconomics,
  25. (2003). Trade and labour usage: An examination of the South African manufacturing industry. Econometric Research Southern Africa Working Paper no. 15.
  26. (1996). Trade liberalization and income distribution”, NBER Working Paper No. w5693
  27. (1993). Trade Policy Review: South Africa, Geneva: World Trade Organisation Secretariat.
  28. (1997). Trade policy,”
  29. (2001). Trade, technology and U.K. wage inequality”,
  30. (1998). What are the results of product-price studies and can we learn from their differences?”,
  31. (1999). Who gains from trade reform? Some remaining puzzles”,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.