Labour unions and wage inequality among African men in South Africa

Figures & data

Table 1: Economic status by period

	2001	2004	2007	2010
Panel A: labour-force participation status
Broad labour-force participation	0.667 (0.471)	0.672 (0.470)	0.676 (0.468)	0.587 (0.492)
Strict labour-force participation	0.539 (0.498)	0.511 (0.500)	0.537 (0.499)	0.510 (0.500)
Number of observations	50 485	51 384	50 352	82 998
Panel B: employment status
Employed	0.559 (0.497)	0.558 (0.497)	0.604 (0.489)	0.608 (0.488)
Strict unemployment	0.250 (0.433)	0.203 (0.402)	0.191 (0.393)	0.260 (0.439)
Broad unemployment	0.441 (0.497)	0.442 (0.497)	0.396 (0.489)	0.392 (0.488)
Number of observations	32 890	32 373	31 643	45 832
Panel C: union status
Union member	0.537 (0.499)	0.417 (0.493)	0.406 (0.491)	0.412 (0.492)
Number of observations	4 511	4 332	5 340	8 822

Note: Standard deviations in parentheses.

Table 2: Descriptive statistics for union and non-union sub-samples by period

	2001		2004		2007		2010
	Non-union	Union	Non-union	Union	Non-union	Union	Non-union	Union
Log hourly wage	2.259 (0.655)	2.510 (0.610)	2.445 (0.706)	2.932 (0.670)	2.751 (0.784)	3.229 (0.762)	3.114 (0.720)	3.723 (0.801)
Demographics
Age	36.002 (9.935)	39.190 (9.014)	35.190 (9.667)	39.761 (9.799)	34.322 (10.081)	39.280 (9.999)	34.468 (9.622)	39.641 (9.954)
Married	0.595 (0.491)	0.741 (0.438)	0.593 (0.491)	0.729 (0.445)	0.493 (0.500)	0.681 (0.466)	0.472 (0.499)	0.635 (0.482)
Education
No schooling	0.052 (0.222)	0.052 (0.221)	0.038 (0.191)	0.050 (0.218)	0.031 (0.173)	0.030 (0.170)	0.022 (0.146)	0.018 (0.131)
Primary	0.210 (0.407)	0.268 (0.443)	0.193 (0.395)	0.215 (0.411)	0.174 (0.379)	0.164 (0.370)	0.135 (0.342)	0.113 (0.317)
Incompletesecondary	0.354 (0.478)	0.279 (0.449)	0.365 (0.482)	0.299 (0.458)	0.404 (0.491)	0.320 (0.466)	0.415 (0.493)	0.266 (0.442)
Matric	0.271 (0.445)	0.217 (0.412)	0.295 (0.456)	0.251 (0.433)	0.273 (0.446)	0.283 (0.450)	0.329 (0.470)	0.350 (0.477)
Certificate	0.017 (0.130)	0.020 (0.140)	0.018 (0.133)	0.016 (0.127)	0.015 (0.121)	0.022 (0.147)	0.011 (0.103)	0.022 (0.146)
Diploma	0.052 (0.223)	0.117 (0.322)	0.056 (0.230)	0.111 (0.314)	0.067 (0.249)	0.130 (0.336)	0.068 (0.252)	0.166 (0.373)
Degree	0.044 (0.204)	0.047 (0.212)	0.034 (0.182)	0.057 (0.233)	0.036 (0.187)	0.052 (0.222)	0.020 (0.141)	0.066 (0.248)
Employment sector / industry
Public sector	0.161 (0.367)	0.392 (0.488)	0.119 (0.323)	0.360 (0.480)	0.090 (0.286)	0.335 (0.472)	0.056 (0.229)	0.386 (0.487)
Mining andquarrying	0.044 (0.205)	0.234 (0.424)	0.029 (0.168)	0.185 (0.388)	0.027 (0.161)	0.148 (0.355)	0.025 (0.156)	0.120 (0.325)
Manufacturing	0.247 (0.431)	0.197 (0.398)	0.202 (0.402)	0.206 (0.405)	0.203 (0.402)	0.202 (0.402)	0.191 (0.393)	0.205 (0.404)
Electricity, gasand watersupply	0.018 (0.133)	0.018 (0.132)	0.009 (0.093)	0.020 (0.139)	0.007 (0.084)	0.013 (0.112)	0.005 (0.072)	0.020 (0.140)
Construction	0.108 (0.310)	0.038 (0.192)	0.146 (0.353)	0.035 (0.184)	0.179 (0.383)	0.035 (0.183)	0.176 (0.381)	0.046 (0.209)
Wholesale andretail trade	0.216 (0.412)	0.091 (0.288)	0.230 (0.421)	0.092 (0.289)	0.250 (0.433)	0.133 (0.340)	0.266 (0.442)	0.078 (0.268)
Transport,storage andcommunication	0.099 (0.299)	0.069 (0.254)	0.077 (0.267)	0.069 (0.254)	0.085 (0.279)	0.062 (0.241)	0.070 (0.256)	0.080 (0.271)
Financialservices	0.131 (0.337)	0.060 (0.238)	0.176 (0.381)	0.085 (0.279)	0.148 (0.355)	0.104 (0.305)	0.180 (0.384)	0.105 (0.307)
Community, socialand personal services	0.137 (0.344)	0.292 (0.455)	0.130 (0.337)	0.308 (0.462)	0.102 (0.302)	0.304 (0.460)	0.086 (0.281)	0.347 (0.476)
Occupation andlocation dummies	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Number ofobservations	1 819	2 692	2 266	2 066	2 887	2 453	4 856	3 966

Note: Standard deviations in parentheses.

Table 3: Labour-force participation and employment probit models (coefficients shown)

	2001	2004	2007	2010
Panel A: labour-force participation
Age	0.349***	0.338***	0.716***	0.347***
Age-squared	–0.004***	–0.004***	–0.004***	–0.004***
Married	0.496***	0.385***	0.412***	0.526***
Primary	0.299***	0.286***	0.282***	0.191***
Incomplete secondary	0.124***	0.119**	0.117***	0.281***
Matric	0.720***	0.906***	0.831***	0.767***
Certificate	0.367***	0.390***	0.301***	0.652***
Diploma	0.609***	1.139***	0.888***	1.114***
Degree	0.658***	0.829***	0.962***	1.039***
Presence of elderly men in household (age > 64)	–0.033	–0.073	–0.048	–0.080**
Presence of elderly women in household (age > 59)	–0.254***	–0.250***	–0.273***	–0.241***
Constant	–5.391***	–5.249***	–5.341***	–5.812***
Panel B: employment
Age	0.152***	0.156***	0.164***	0.155***
Age-squared	–0.002***	–0.002***	–0.002***	–0.002***
Married	0.911***	0.937***	0.936***	0.864***
Primary	–0.002	0.038	0.095**	–0.187**
Incomplete secondary	0.032	–0.075	0.054	–0.226***
Matric	0.113*	0.026	0.152**	–0.055
Certificate	0.258*	0.287**	0.293**	0.181**
Diploma	0.357***	0.488***	0.555***	0.205*
Degree	0.518***	0.797***	0.590***	0.538***
Proportion of other adults in a householdwho are employed	5.165***	5.366***	5.199***	4.932***
Constant	–4.826***	–4.993***	–4.877***	–4.726***
athrho	0.472***	0.468***	0.451***	0.367***

Notes: Location dummies are also included in the labour-force participation and employment equations. Reference group: no schooling. Significance level: ***1%, **5%, *10%.

Table 4: Marginal effects for union membership probit models, by period

	2001		2004		2007		2010
	Reduced form	Structural form	Reduced form	Structural form	Reduced form	Structural form	Reduced form	Structural form
Age	0.030***	0.030***	0.017***	0.019***	0.030***	0.026***	0.031***	0.033***
Age-squared	0.000***	0.000***	0.000***	0.000***	0.000***	0.000***	0.000***	0.000***
Married	0.015***	0.024***	–0.038***	–0.035***	0.053***	0.069***	–0.024***	–0.024***
Primary	0.055***	0.073***	–0.051***	–0.037***	0.102***	0.076***	0.088***	0.077***
Incomplete secondary	0.037***	0.057***	–0.004**	0.012***	0.174***	0.142***	0.132***	0.126***
Matric	0.044***	0.054***	0.049***	0.059***	0.221***	0.148***	0.223***	0.221***
Certificate	0.161***	0.191***	–0.039***	0.022***	0.261***	0.184***	0.320***	0.311***
Diploma	0.153***	0.182***	0.098***	0.115***	0.239***	0.220***	0.300***	0.288***
Degree	0.043***	0.087***	0.051***	0.123***	0.129***	0.216***	0.213***	0.229***
Mining and quarrying	0.266***	0.266***	0.248***	0.236***	0.385***	0.376***	0.364***	0.370***
Electricity, gas and water supply	–0.139***	–0.151***	–0.082***	–0.070***	0.023***	0.084***	0.119***	0.150***
Construction	–0.243***	–0.261***	–0.217***	–0.192***	–0.244***	–0.219***	–0.215***	–0.209***
Wholesale and retail trade	–0.119***	–0.126***	–0.147***	–0.109***	–0.092***	–0.026***	–0.189***	–0.182***
Transport, storage and comm.	–0.085***	–0.093***	–0.076***	–0.088***	–0.063***	–0.068***	–0.018***	–0.021***
Financial services	–0.081***	–0.087***	–0.118***	–0.083***	–0.011***	0.015***	–0.088***	–0.071***
Community, social and pers.services	–0.043***	–0.054***	–0.070***	–0.076***	0.042***	0.056***	–0.049***	–0.058***
Large firms (50/more employees)	0.144***	0.043***	0.157***	0.042***	0.147***	0.037***	0.209***	0.039***
Job tenure	0.041***	–0.001***	0.043***	–0.001***	0.041***	–0.001***	0.038***	–0.001***
Job tenure squared	–0.001***	0.248***	–0.001***	0.317***	–0.001***	0.336***	–0.001***	0.180***
Selection term	–0.019***	–0.019***	–0.012***	–0.011***	–0.014***	–0.013***	–0.034***	–0.034***
Other union members	0.248***	0.148***	0.314***	0.150***	0.334***	0.150***	0.179***	0.208***
Wage differential	0.117***	0.153***	0.234***	0.072***

Notes: Other variables included in all the models are a constant term, urban, provincial and public-sector dummies. Reference groups: no schooling, manufacturing and Gauteng province. Results for age-squared are negative but appear as positive due to rounding off. Significance level: ***1%, **5%, *10%.

Table 5: Wage equations by union status

	2001		2004		2007		2010
	Union	Non-union	Union	Non-union	Union	Non-union	Union	Non-union
Age	0.015*	0.019*	0.015*	0.025***	0.010	–0.008	–0.007	0.008
Age-squared	0.000	0.000	0.000	0.000**	0.000	0.000	0.000	0.000
Married	0.023	0.096***	0.039	0.056**	0.012	0.084***	–0.003	0.002
Primary	–0.023	0.136**	0.010	0.100*	0.110	0.003	0.185**	–0.073
Incomplete secondary	0.116***	0.290***	0.088*	0.195***	0.223***	0.088	0.271***	0.067
Matric	0.338***	0.420***	0.332***	0.381***	0.535***	0.215***	0.412***	0.226***
Certificate	0.376***	0.666***	0.476***	0.789***	0.721***	0.361***	0.386***	0.049
Diploma	0.493***	0.743***	0.749***	0.696***	0.890***	0.695***	0.889***	0.427***
Degree	0.807***	0.973***	0.854***	1.194***	1.214***	1.347***	0.996***	1.042***
Urban	0.093***	–0.007	0.112***	0.065*	0.142***	0.141***	0.180***	0.192***
Mining and quarrying	0.266***	0.266***	0.089**	0.006	0.068	0.024	0.117**	0.027
Electricity, gas and water supply	–0.139***	–0.151***	–0.062	0.008	0.006	0.281**	–0.273***	0.122
Construction	–0.243***	–0.261***	–0.160**	0.060	–0.052	0.077**	–0.129*	–0.031
Wholesale and retail trade	–0.119***	–0.126***	–0.319***	0.012	–0.311***	–0.004	–0.260***	–0.063
Transport, storage and comm.	–0.085***	–0.093***	0.044	–0.062	–0.087	–0.115**	–0.027	–0.124***
Financial services	–0.081***	–0.087***	–0.282***	0.058	–0.215***	–0.062	–0.413***	–0.044
Community, social and pers. services	–0.043***	–0.054***	0.002	–0.006	0.014	0.056	0.024	–0.099*
Large firms (50/more employees)	0.012	0.056*	0.077***	0.034	0.073***	0.086***	0.010	–0.029
Job tenure	0.022***	0.014**	0.012**	0.002	0.023***	0.007	0.020***	0.015**
Job tenure squared	0.000*	0.000*	0.000	0.000	0.000**	0.000	0.000***	–0.001***
Selection term	–0.398***	–0.189**	–0.128**	–0.387***	–0.094*	–0.330***	–0.103	–0.218**
Chow test (F-statistic)	(3.660)		(7.240)		(6.170)		(6.820)
P-value	(0.000)		(0.000)		(0.000)		(0.000)

Notes: Other variables included in all the models are a constant term, urban, provincial, public sector and occupational dummies. Reference groups: no schooling, manufacturing, Gauteng province and machine and plant operators. Significance level: ***1%, **5%, *10%.

Table 6: Union wage premium

Year	Union premium	Difference	95% confidence interval
2001	0.567 (0.003)	—	[0.572; 0.562]
2004	0.541 (0.004)	0.025	[0.549; 0.534]
2007	0.476 (0.004)	0.066	[0.483; 0.469]
2010	0.424 (0.002)	0.052	[0.428; 0.420]

Notes: Standard errors in parentheses.

Table 7: Impact of unions on wage inequality

	2001	2004	2007	2010
Panel A: Inequality measures
With premium
Gini	0.297	0.349	0.367	0.370
Theil index	0.147	0.210	0.243	0.249
Atkinson (e = 0.5)	0.069	0.096	0.108	0.110
Atkinson(e = 1)	0.129	0.175	0.191	0.196
Atkinson(e = 2)	0.225	0.289	0.304	0.311
Without premium
Gini	0.267	0.286	0.323	0.320
Theil index	0.137	0.163	0.237	0.215
Atkinson (e = 0.5)	0.061	0.071	0.098	0.091
Atkinson(e = 1)	0.110	0.126	0.163	0.156
Atkinson(e = 2)	0.179	0.200	0.240	0.240
Panel B: Effect of unions on wage structure
Mean predicted log wages
Union workers	2.725	2.833	3.099	3.639
Non-union workers	2.159	2.299	2.622	3.208
Union gap	0.566	0.534	0.477	0.431
Variance decomposition
Overall variance	0.296	0.379	0.410	0.516
Variance in non-union sector	0.226	0.306	0.355	0.477
Within-sector effect	–0.014	–0.013	–0.017	–0.019
Between-sector effect	0.084	0.086	0.072	0.058
Total effect	0.070	0.073	0.056	0.039

Table 8: Robustness checks

	Baseline: excluding informal sector workers				Including informal sector workers				Workers with age > 25 years				Workers with education < matric
	2001	2004	2007	2010	2001	2004	2007	2010	2001	2004	2007	2010	2001	2004	2007	2010
Mean predicted log wages
Union workers	2.725	2.833	3.099	3.639	2.442	2.740	2.968	3.551	2.719	2.826	3.185	3.607	2.590	2.634	2.903	3.373
Non-union workers	2.159	2.299	2.622	3.208	1.580	2.050	2.434	3.055	2.127	2.247	2.640	3.108	2.009	2.079	2.419	2.971
Union gap	0.566	0.534	0.477	0.431	0.863	0.690	0.534	0.496	0.592	0.579	0.544	0.499	0.581	0.556	0.483	0.402
Variance decomposition
Overall variance	0.296	0.379	0.410	0.516	0.646	0.520	0.531	0.553	0.320	0.426	0.421	0.503	0.298	0.309	0.336	0.470
Variance in non-union sector	0.226	0.306	0.355	0.477	0.475	0.423	0.474	0.504	0.239	0.337	0.358	0.454	0.219	0.241	0.283	0.436
Within-sector effect	–0.014	–0.013	–0.017	–0.019	–0.040	–0.025	–0.016	–0.020	–0.010	–0.016	–0.027	–0.027	–0.010	–0.015	–0.008	–0.018
Between-sector effect	0.084	0.086	0.072	0.058	0.211	0.123	0.077	0.069	0.091	0.105	0.090	0.076	0.089	0.083	0.061	0.053
Total effect	0.070	0.073	0.056	0.039	0.171	0.097	0.060	0.049	0.081	0.089	0.063	0.049	0.079	0.068	0.054	0.035

Table A1: Variable definitions

Variable	Description
Union (dependent variable)	Dummy variable: 1 if individual is a union member, 0 otherwise
Wage (dependent variable)	An individual's log hourly wage deflated to 2001 values
Age	An individual's age in completed years
Married	Dummy variable: 1 if individual is married civilly or traditionally, 0 otherwise
Education
No education^a	Dummy variable: 1 if individual has 0 years of schooling or Grade R, 0 otherwise
Primary	Dummy variable: 1 if individual's schooling is in the range Grade 1 to 7, 0 otherwise
Incomplete secondary	Dummy variable: 1 if individual's schooling is in the range Grade 8 to 11, 0 otherwise
Secondary	Dummy variable: 1 if individual's schooling is Grade 12, 0 otherwise
Certificate	Dummy variable: 1 if individual's schooling is vocational or technical training, 0 otherwise
Diploma	Dummy variable: 1 if individual's schooling is diploma, 0 otherwise
Degree	Dummy variable: 1 if individual's schooling is bachelor's degree and above, 0 otherwise
Provinces
Gauteng^a	Dummy variable: 1 if individual resides in Gauteng province, 0 otherwise
Eastern Cape	Dummy variable: 1 if individual resides in Eastern Cape province, 0 otherwise
Free State	Dummy variable: 1 if individual resides in Free State province, 0 otherwise
KwaZulu Natal	Dummy variable: 1 if individual resides in KwaZulu Natal province, 0 otherwise
Mpumalanga	Dummy variable: 1 if individual resides in Mpumalanga province, 0 otherwise
North West	Dummy variable: 1 if individual resides in North West province, 0 otherwise
Northern Cape	Dummy variable: 1 if individual resides in Northern Cape province, 0 otherwise
Northern Province	Dummy variable: 1 if individual resides in Northern province, 0 otherwise
Western Cape	Dummy variable: 1 if individual resides in Western Cape province, 0 otherwise
Urban	Dummy variable: 1 if individual resides in an urban area, 0 otherwise
Industries
Mining	Dummy variable: 1 if an individual works in mining sector, 0 otherwise
Manufacturing^a	Dummy variable: 1 if an individual works in manufacturing sector , 0 otherwise
Electricity	Dummy variable: 1 if an individual works in electricity sector, 0 otherwise
Construction	Dummy variable: 1 if an individual works in construction sector, 0 otherwise
Trade	Dummy variable: 1 if an individual works in trade sector, 0 otherwise
Transport	Dummy variable: 1 if an individual works in transport sector, 0 otherwise
Finance	Dummy variable: 1 if an individual works in finance sector, 0 otherwise
Services	Dummy variable: 1 if an individual works in services sector, 0 otherwise
Firm-size	Dummy variable for firms with more than 50 employees
Job tenure	number of years that an individual has spent with his/her main employer
Public sector	Dummy variable: 1 if an individual is employed in the public sector, 0 otherwise
Occupations
Manager	Dummy variable: 1 if an individual is a manager, 0 otherwise
Professional	Dummy variable: 1 if an individual is a professional, 0 otherwise
Technician	Dummy variable: 1 if an individual is a technician, 0 otherwise
Clerk	Dummy variable: 1 if an individual is a clerk, 0 otherwise
Service	Dummy variable: 1 if an individual is a services worker, 0 otherwise
Skilled agriculture/fishery	Dummy variable: 1 if an individual is a skilled worker, 0 otherwise
Artisan	Dummy variable: 1 if an individual is a craftsman, 0 otherwise
Operator^a	Dummy variable: 1 if an individual is an operator, 0 otherwise
Elementary	Dummy variable: 1 if an individual does elementary jobs, 0 otherwise
Labour-force participationbroad	Dummy variable: 1 if employed, active job seeker or discouraged worker
Employed	Dummy variable: 1 if employed full time in formal non-agriculture sector
Other household unionmembers^b	Dummy variable for co-residence with other union members
Old men^c	Dummy variable for co-residence with men aged 65 and above
Old women^c	Dummy variable for co-residence with women aged 60 and above
Proportion of other adultsemployed^d	Proportion of other working age people in a respondent's household who are employed

Notes: ^aBase category. ^bExclusion restriction in the union membership probits. ^cExclusion restrictions in the broad labour-force participation model. ^dExclusion restrictions in the employment model.