Direct measures of labor-force quality from international mathematics and science test scores are strongly related to growth. Indirect specification tests are generally consistent with a causal link: direct spending on schools is unrelated to student performance differences; the estimated growth effects of improved labor-force quality hold when East Asian countries are excluded; and, finally, home-country quality differences of immigrants are directly related to U.S. earnings if the immigrants are educated in their own country but not in the United States. The last estimates of micro productivity effects, however, introduce uncertainty about the magnitude of the growth effects.

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Schooling, Labor-Force Quality, and the Growth of Nations

Economics Of Discrimination

American Apartheid: Segregation and the Making of the Underclass. Douglas S. Massey , Nancy A. Denton

Thomas Piketty’s (2013) book, Capital in the 21st Century, follows in the tradition of the great classical economists, like Marx and Ricardo, in formulating general laws of capitalism to diagnose and predict the dynamics of inequality. We argue that general economic laws are unhelpful as a guide to understand the past or predict the future, because they ignore the central role of political and economic institutions, as well as the endogenous evolution of technology, in shaping the distribution of resources in society. We use regression evidence to show that the main economic force emphasized in Piketty’s book, the gap between the interest rate and the growth rate, does not appear to explain historical patterns of inequality (especially, the share of income accruing to the upper tail of the distribution). We then use the histories of inequality of South Africa and Sweden to illustrate that inequality dynamics cannot be understood without embedding economic factors in the context of economic and political institutions, and also that the focus on the share of top incomes can give a misleading characterization of the true nature of inequality.

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The Rise and Decline of General Laws of Capitalism

To what extent do colonial public investments continue to influence current regional inequalities in French-speaking West Africa? Using a new database and the spatial discontinuities of colonial investment policy, this paper gives evidence that early colonial investments had large and persistent effects on current outcomes. The nature of investments also matters. Current educational outcomes have been more specifically determined by colonial investments in education rather than health and infrastructures, and vice versa. I show that a major channel for this historical dependency is a strong persistence of investments; regions that got more at the early colonial times continued to get more.

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History Matters: The Long-Term Impact of Colonial Public Investments in French West Africa

This paper investigates the extent of the mark-up of the South African manufacturing sector, taking into account a number of characteristics of its component industries. We find significant mark-ups to be present in the South African manufacturing sector. In comparative terms, the mark-up is approximately twice that found for the US manufacturing sector. We find that industry concentration exerts a positive influence on the mark-up over marginal cost while an indicator of competitiveness suggests that an increase in an industry's competitiveness relative to other industries allows it to raise its mark-up. However, within-industry increases in competitiveness reduces the mark-up. We also analyse the impact of import and export penetration. Both import and export penetration serve to lower the mark-up. The impact of the business cycle on mark-up indicates that the mark-up is countercyclical. Finally, accounting for intermediate inputs significantly lowers the absolute size of the mark-up, controlling for the industry's concentration ratio. However, relative to findings on the US manufacturing industries, SA manufacturing mark-ups remain approximately twice as large. Copyright 2007, Oxford University Press.

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Mark-Up Pricing in South African Industry

Changing labour market conditions in South Africa: a sectoral analysis of the period 1970-1997

South Africa has consistently ranked very poorly in the Global Entrepreneurship Monitor survey in terms of entrepreneurial activity. It is clear that South Africa is not producing a sufficiently entrepreneurial economy and this needs to be addressed so as to create employment, expand markets, increase production and revitalize communities. This paper examines the entrepreneurial traits of a diverse group of young adults in South Africa. It draws on a sample of 609 university students and looks at their attitudes towards and perceptions of entrepreneurship, entrepreneurial opportunities and the broader economic environment in an attempt to clarify how South Africans view entrepreneurship. Although the data do not allow the identification of causal relationships, descriptive statistics show that socio-economic elements play a noteworthy role in people’s perceptions of the value of entrepreneurship and thus need to be incorporated in entrepreneurial models.

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Entrepreneurship in an emerging and culturally diverse economy: a South African survey of perceptions

Anecdotal evidence shows that despite extensive restrictions on the hiring of African workers, these workers were increasingly employed in semi-skilled occupations throughout the apartheid era. This article shows that White skill acquisition throughout the apartheid era reduced the supply of White semi-skilled workers and led to the removal of job reservation, the process of reserving skilled and semi-skilled jobs for Whites. Although job reservation declined, there is little evidence of a decline in racial segregation in the labour market. It is concluded that the transformation in the labour market was driven by White economic incentives rather than any evident change in White preferences regarding racial segregation.

Labour markets during apartheid in South Africa

We provide new evidence of one channel through which circular labor migration has long run effects on origin communities: by raising completed human capital of the next generation. We estimate the net effects of migration from Malawi to South African mines using newly digitized Census and administrative data on access to mine jobs, a difference-in-differences strategy and two opposite-signed and plausibly exogenous shocks to the option to migrate. Twenty years after these shocks, human capital is 4.8-6.9% higher among cohorts who were eligible for schooling in communities with the easiest access to migrant jobs.

Martine Mariotti

Papers

Mark-Up Pricing in South African Industry

Changing labour market conditions in South Africa: a sectoral analysis of the period 1970-1997

Entrepreneurship in an emerging and culturally diverse economy: a South African survey of perceptions

Labour markets during apartheid in South Africa

The Long Run Effects of Labor Migration on Human Capital Formation in Communities of Origin