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Author: search.filters.author.Yu, KatrinaSubject: search.filters.subject.Wages--South Africa

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    Do informal workers suffer an earnings penalty? A panel data analysis of earnings gaps in South Africa
    (2016) Yu, Katrina
    Drawing on data from the National Income Dynamics Survey (NIDS) from 2008-2012, this paper investigates informal-formal earnings gaps in South Africa in order to assess the validity of labour market segmentation theories and to shed light on the motivations behind informal labour. In addition to controlling for observed individual characteristics using pooled OLS regression, fixed effects and quantile regressions are also estimated to control for time-invariant individual heterogeneity and to assess variations in earnings gap along the income distribution. Results are indicative of segmentation both within informal employment and in the labour market as a whole. Overall, informal employment in South Africa can be characterised as highly diverse and heterogeneous, with earnings differentials varying by employment type (whether salaried or self-employed), gender, and level of income. This earnings analysis is complemented by a brief exploration into the non-pecuniary characteristics of informal employment, with a consideration of the relationship between subjective wellbeing and informality.