Race and trust in post-apartheid South Africa

I examine the impact of racial identity on behavior in trust games played by White, Black and Colored high school students in South Africa. There is a systematic pattern of distrust towards Black partners, even by Black proposers, partially attributable to mistaken expectations. White proposers are significantly less likely to engage in a strategic interaction at all when paired with a Black partner, while Colored and Black proposers engage in exchange but at lower levels than when paired with nonBlacks. However, greater racial diversity in schools and friendship groups is positively and significaantly associated with greater trust towards Black partners.

The Labour Supply of Sex Workers in Cape Town

Traditional labour economics predicts that the supply of labour will increase as earnings increase. However, labour supply need not be positive, especially if workers make decisions based on short-term income targets. Income targeting may best describe jobs where workers decide on working hours and where wages are uncorrelated across days. This paper examines the labour supply of sex workers in Cape Town, whose working conditions largely fulfill these criteria. Contrary to traditional economic theory, we find evidence of a negative labour supply curve.Labour supply, sex workers, hyperbolic discounting

Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis

This paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule.

Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis

This paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule.

Evaluating the Impact of Health Programmes

This paper has two broad objectives. The first objective is broadly methodological and deals with some of the more pertinent estimation issues one should be aware of when studying the impact of health status on economic outcomes. We discuss some alternatives for constructing counterfactuals when designing health program evaluations such as randomization, matching and instrumental variables. Our second objective is to present a review of the existing evidence on the impact of health interventions on individual welfare.

Global Apparel Production and Sweatshop Labor: Can Raising Retail Prices Finance Living Wages?

This paper provides some empirical evidence on issues raised by the global antisweatshop movement. We first consider the relationship between wage and employment growth, finding no consistent trade-off between them. We then measure the share of labor costs in the production of garments in the United States and Mexico. We find that the retail price increases necessary to absorb the costs of substantially raising wages are small, well within the range of price increases that polls suggest U.S. consumers are willing to pay. We close by considering some implications of these results.Global sweatshop labor; empirical analysis

Wage Subsidies to Combat Unemployment and Poverty: Assessing South Africa’s Options

Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this country’s massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africa’s particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economy’s employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth.

Wage subsidies to combat unemployment and poverty

Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this country�s massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africa�s particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economy�s employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth.Computable General Equilibrium (CGE) microsimulation modeling, Developing countries, economic growth, employment absorption capacity, labor costs, macro-micro analysis, Unemployment, wage subsidies,

What's in a name? Racial identity and altruism in post-apartheid South Africa

This paper reports the results of an economic experiment which was designed to test the effect of racial identity on generosity in a non-strategic setting. A sample of undergraduate University students was recruited to participate in a Dictator game, where surnames of individuals were revealed to convey information about racial identity. Results indicate that compared to a set of control experiments where participant identity was kept anonymous, revealing racial identity has a significant and positive impact on the size of the offers made. However, while Black participants did not vary their offers based on the racial identity of their partners, White participants were more generous towards White partners than Black partners, exhibiting insider favouritism in their offers.

What’s in a name? Racial identity and altruism in post-apartheid South Africa

This paper reports the results of an economic experiment which was designed to test the effect of racial identity on generosity in a non-strategic setting. A sample of undergraduate University students was recruited to participate in a Dictator game, where surnames of individuals were revealed to convey information about racial identity. Results indicate that compared to a set of control experiments where participant identity was kept anonymous, revealing racial identity has a significant and positive impact on the size of the offers made. However, while Black participants did not vary their offers based on the racial identity of their partners, White participants were more generous towards White partners than Black partners, exhibiting insider favouritism in their offers.