Abstract/Details

Investment, labor demand, and political conflict in South Africa


2001 2001

Other formats: Order a copy

Abstract (summary)

This dissertation develops theoretical and econometric models of investment and labor demand in South Africa in order to shed light on the decline in the rate of fixed investment beginning in the mid 1970s, the nature of business compliance with racebased labor market policies, and the emergence of “jobless growth” in a period of heightened political and social conflict.

I develop a model of investment and choice of factor intensity that incorporates roles for both bargained wages and political unrest. Building from this theoretical base, the dissertation investigates the hypothesis that social conflict depresses investment. An index of political unrest in South Africa is created using data on strike activity, prison populations, and detentions under the apartheid security laws. Estimates using a panel data set show significant effects on investment of the after-tax rate of profits, an accelerator term, and the index of political unrest. Increases in political instability explain the largest portion of the decline in the rate of investment in South Africa over this period. The following chapter explores whether political unrest contributes to non-wage “hassle costs” of employing labor that can lead, in a labor surplus/capital-poor economy, to higher levels of capital-intensity. Econometric estimates show significant negative effects of higher average product wages and greater political unrest on the labor-capital ratio.

The fifth chapter creates a model of business compliance with apartheid labor market policies—in particular, job reservations and controls over urban influx. Apartheid labor market policies are modeled as a multiple-player prisoner's dilemma in which the incentive to defect on the part of individual firms (by employing more low-wage black workers than apartheid policies allowed) threatens the collective benefits of the racist policies in providing a disciplined labor force at low cost. Renewable contractual relationships and conformist behavior provide the incentives to comply with the apartheid regulations. The model's predictions—that the level of non-compliance climbs as the ability of the state to police the cartel and maintain incentives falls—are shown to be reflected in the historical record.

Indexing (details)


Subject
Labor economics;
Political science;
Labor relations;
Labor market;
Investments;
Economic models;
Studies
Classification
0510: Labor economics
0615: Political science
0629: Labor relations
Identifier / keyword
Social sciences; Apartheid; Investment; Labor demand; Political conflict; South Africa
Title
Investment, labor demand, and political conflict in South Africa
Author
Heintz, James S.
Number of pages
201
Publication year
2001
Degree date
2001
School code
0118
Source
DAI-A 62/04, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
ISBN
9780493219004, 0493219005
Advisor
Bowles, Samuel
University/institution
University of Massachusetts Amherst
University location
United States -- Massachusetts
Degree
Ph.D.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
3012137
ProQuest document ID
230841864
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/230841864
Access the complete full text

You can get the full text of this document if it is part of your institution's ProQuest subscription.

Try one of the following:

  • Connect to ProQuest through your library network and search for the document from there.
  • Request the document from your library.
  • Go to the ProQuest login page and enter a ProQuest or My Research username / password.