Product market competition and the labour market: Evidence from South Africa

Arbeitspapier

We study the relationship between product market competition and labour market outcomes in South Africa. We combine firm-level data from tax records with individual-level data from the labour force survey. We estimate markups across sectors, and derive a measure of employment concentration in high-markup sectors across South African district municipalities. We then test whether individual labour market outcomes differ systematically in those district municipalities where employment is more concentrated in high-markup sectors. We find that higher employment concentration in high-markup sectors is associated with higher unemployment and lower likelihood of transitions from unemployment to employment. This is differentially more the case for non-White, lower educated, and young individuals. The relationship remains strong when conditioning on a rich set of individual- and district-level covariates, including employment concentration per se.

Object Details

• ISBN: 978-92-9256-796-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2020/39

Classification and Topics

• Classification: Wirtschaft
• Subject: product market competition ; tax data ; unemployment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Amodio, Francesco ; Di Maio, Michele ; Li, Yifan ; Piraino, Patrizio
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2020

Further information

• DOI: doi:10.35188/UNU-WIDER/2020/796-5
• Handle: http://hdl.handle.net/10419/229263
• Last update: 10.03.2025, 11:44 AM CET