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Article
Publication date: 7 September 2015

Nik Theodore, Derick Blaauw, Catherina Schenck, Abel Valenzuela Jr., Christie Schoeman and Edwin Meléndez

The purpose of this paper is to compare conditions in informal day-labor markets in South Africa and the USA to better understand the nature of worker vulnerabilities in this…

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Abstract

Purpose

The purpose of this paper is to compare conditions in informal day-labor markets in South Africa and the USA to better understand the nature of worker vulnerabilities in this market, as well as the economic conditions that have contributed to the growth of day labor. The conclusion considers interventions that are underway in the two countries to improve conditions in day-labor markets.

Design/methodology/approach

The paper is based on national surveys of day laborers in South Africa and the USA. A random sample of day laborers seeking work at informal hiring sites was undertaken in each country. The paper presents key findings, compares conditions in South Africa and the USA, and analyzes the relationship between economic change, labor-market dynamics, and worker vulnerability.

Findings

Day-labor work is characterized by low pay, hazardous conditions on the job, and tremendous income insecurity. The day-labor markets in South Africa and the USA perform somewhat different functions within regional economies. Within South Africa, day labor can be regarded as a survival strategy. The growth of day labor in South Africa over the past decade is a manifestation of a formal labor market that is incapable of absorbing the structurally unemployed. Here, day labor is the employment of last resort, allowing workers to subsist on the fringes of the mainstream economy, but offering few pathways into the formal sector. In the USA, the day labor workforce is a largely undocumented-immigrant workforce. Workers seek work at informal hiring sites, maintaining a tenuous hold on jobs in the construction industry. There is evidence of some mobility into more stable and better paying employment.

Practical implications

This paper documents the need for policies and programs to increase employment opportunities for day laborers and to better enforce labor standards in the informal economy.

Originality/value

This paper summarizes findings from the only two national surveys of day laborers that have been conducted, and it compares for the first time the dynamic within growing day-labor markets in a developed- and emerging-market context.

Details

International Journal of Manpower, vol. 36 no. 6
Type: Research Article
ISSN: 0143-7720

Keywords

Available. Content available
Book part
Publication date: 14 November 2012

Abstract

Details

The Impact of HIV/AIDS on Education Worldwide
Type: Book
ISBN: 978-1-78190-233-2

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Article
Publication date: 4 December 2017

Temitope Lydia A. Leshoro

The commonly adopted view of the relationship between government spending and economic growth follows the Keynesian approach, in which government spending is considered to…

176

Abstract

Purpose

The commonly adopted view of the relationship between government spending and economic growth follows the Keynesian approach, in which government spending is considered to determine economic growth. However, there is another theory, which suggests that economic growth in fact determines government spending. This is Wagner’s hypothesis. The purpose of this paper is to investigate which of the two approaches applies to South Africa, and further observes the level of non-linearity between the two variables.

Design/methodology/approach

This study was carried out using quarterly time series data from 1980Q1 to 2015Q1. Granger causality technique was used to observe the direction of causality between the two variables, while regression error specification test (RESET) was employed to determine whether the variables exhibit linear or non-linear behaviour. This was followed by observing the threshold band, using two techniques, namely, sample splitting threshold regression and quadratic generalised method of moments.

Findings

The causality result shows that South Africa follows Wagner’s law, whereby government spending is determined by economic growth, supporting Odhiambo (2015). The RESET result shows that the variables depict a non-linear relationship, thus the government spending economic growth model is non-linear. It was found that if positive economic development is to be achieved, economic growth should preferably be kept within the −1.69 and 3.0 per cent band, and specifically above 1 per cent band.

Originality/value

The unique contribution of this study is that no previous study has attempted the non-linear government spending-economic growth nexus whether within the Keynesian or Wagner law for South Africa.

Details

African Journal of Economic and Management Studies, vol. 8 no. 4
Type: Research Article
ISSN: 2040-0705

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