What Does South Africa's Pattern of Trade Say About its Labor Markets?
IMF Working Papers, October 1, 2001
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Bibliographic details
- Authors: Arvind Subramanian, Trevor Serge Coleridge Alleyne
- Published: October 1, 2001
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856828.001
Overview and Research Question
- Examines the factor intensity of South Africa's trade.
- Investigates whether South African production and trade reveal the country to be capital abundant or labor abundant.
- Authors: Arvind Subramanian, Trevor Serge Coleridge Alleyne.
- Date: October 1, 2001.
Key Findings
- South Africa is revealed through its trade pattern to be capital abundant (relative to labor).
- This revealed capital abundance holds especially for South Africa's trade with its high income partners.
- The revealed capital intensity of South African production was not reversed during the 1990s after the dismantling of apartheid.
- The favoring of capital use occurs against a background of high and rising under-utilization of the country's labor resources.
- These patterns raise questions about the functioning of South Africa's labor market institutions.
Analytical Themes
- Factor intensity and revealed comparative advantage inferred from trade patterns.
- Comparison of South Africa's trade composition with partner countries of differing income levels.
- Temporal analysis emphasizing persistence of capital intensity through the 1990s.
- Implications for labor utilization given capital-favoring production structure.
Policy Implications and Questions Raised
- The observed capital bias in production and trade suggests evaluation of labor market institutions is warranted.
- Policymakers may need to investigate mechanisms that contribute to under-utilization of labor despite capital-intensive production.
- The persistence of capital intensity post-apartheid points to structural issues not solely explained by prior political constraints.
Subject Tags and Keywords (as listed)
- Subject: Capital productivity, Consumption, Exports, International trade, Labor, National accounts, Production, Trade balance
- Keywords: Africa, Capital productivity, Consumption, disaggregated trade data, Exports, factor intensity, industry trade, intensity of trade and production, manufactured goods, merchandise trade account, mi fontweight, production structure, South Africa, South Africa's net export, South Africa's trade, trade, Trade balance, trade pattern, WEFA South Africa, WP