Working papers & works in progress

Selected works in progress

(very provisional titles)

Rent sharing, wage floors and development with Ihsaan Bassier
[Latest version]
Faced with more favorable demand conditions, many firms raise wages. However, we show that firms with labour market power, lower productivity, and binding wage floors will absorb these positive revenue-productivity shocks as excess profits instead of increasing wages or employment. Our prediction follows from a simple but novel theoretical insight under a standard framework of monopsonistic competition, and we empirically test this theory in South Africa using firm-level administrative data. We first explain how firm wage-setting behavior changes at a productivity threshold directly related to the wage floor, and then show how the predicted wage, employment and profit patterns are evident in the cross-section of firms covered by collective bargaining agreements. We then replicate and extend a leading method of identifying rent-sharing elasticities, but estimated separately by firm revenue-productivity bins. As predicted by the theory, we find that firms below the threshold increase wages and employment less, and profits more, in response to revenue-productivity shocks, and that there is a break at the threshold where wage floors bind. The study complicates the conclusions emerging from the literature on firm rent-sharing, and forms part of an explanation for “stalled” development and “jobless growth”.

Surviving in the dark: the mortality effects of reducing rolling blackouts
[WIDER/SA-TIED Working Paper]
South Africa frequently experiences rolling blackouts (“load shedding”) due to shortfalls in electricity generation. This is a common problem across the developing world, and yet the developmental impacts of insufficient and unstable electricity supply, and the benefits of mitigating this, are poorly understood. I use the introduction of a unique load shedding reduction policy in parts of South Africa’s second-largest city, Cape Town, to investigate the mortality effects of load shedding and its mitigation. To identify these effects, I use a stacked synthetic control design that leverages the episodic nature of load shedding between 2014 and 2019. While the estimates are imprecise, I find robust evidence that the mitigation policy statistically significantly reduces mortality in Cape Town relative to other parts of South Africa experiencing unmitigated load shedding. The incomplete geographic coverage of the mitigation policy entrenches existing inequalities in the city.

Working Papers

Stimulus effects of a large public employment programme with Ihsaan Bassier
[January 2024 version | Op-Ed]
Media: CNBC Africa, Newzroom Afrika

Social Distress and (Some) Relief: Estimating the impact of pandemic job loss on poverty in South Africa with Ihsaan Bassier and Maya Goldman
Accepted, International Journal of Microsimulation
[July 2022 version]

Estimating employment responses to South Africa’s Employment Tax Incentive with Amina Ebrahim
[July 2021 version]

Markups and market structure in South Africa: What can be learnt from new administrative data?
[August 2019 version]

South African poverty lines: A review and two new money-metric thresholds with Murray Leibbrandt and Ingrid Woolard
[August 2015 version | Op-Ed]