An empirical analysis of trends in female labour force participation and the gender wage gap in South Africa

abstract

In this analysis, we constructed cohort data from repeated cross-sections using the Post-Apartheid Labour Market Series (PALMS) and examined trends in labour market outcomes in the South African labour market. Labour force participation trends show a substantial and persistent gender gap over the life cycle. The gender gap in employment is wide at young ages but seems to decline over the life cycle confirming that younger women are more vulnerable to high unemployment. Earnings trajectories of more recent cohorts of men and women are above those of older cohorts showing that younger cohorts have experienced gains in earnings over time. The gender wage gap is smaller for the youngest cohorts an indication of generational effects. This result suggests a long-term narrowing of the gender wage gap as male and female labour market characteristics become similar. The significance of age is evident as the gender wage gap increases over the life cycle indicating a discontinuous labour force participation for women. Interventions to reduce this discontinuity require among other things alleviating the disproportionate burden of care work shouldered by women to enable them to commit more time to the labour market. A cohort analysis of the occupational distribution by gender shows that more recent cohorts of women are in better occupations than the generations of women before them. This is attributable to improved human capital and better labour market opportunities for younger cohorts. A further narrowing of the gender wage gap requires interventions that will ensure a better distribution of women in male dominated occupations. We note however, that African men and women seem to be dropping out of the labour market at an early age which implies that other factors aside from motherhood or family responsibilities (possibly health issues) are causing this decline in participation.

keywords:

• Labour force participation
• gender wage gap
• cohort analysis
• repeated cross-sections

Notes

1 Some of the labour market policies enacted since 1994 include the Labour Relations Act, number 66 of 1995 which governs how employers and employees interact in the work place, the Basic Conditions of Employment Act, number 75 of 1997 which regulates working conditions including working hours and allows the minister of labour to determine minimum wages for employees by sector, the Employment Equity Act number 55 of 1998 which aims to promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination and the Black Economic Empowerment Act, number 53 of 2003 whose objectives are to facilitate broad-based black economic transformation in order to enable meaningful participation of black people in the economy (Leibbrandt et al, 2010).

2 Own calculation from PALMS. Female share of the labour force is calculated as the proportion of all economically active individuals that is female. An individual is economically active if they are employed or unemployed but searching.

3 The OHSs, the LFSs and the QLFSs are all collected by Statistics South Africa (Stats SA) which is the national statistical body.

4 The 1993 OHS is however not included in PALMS as it did not cover the whole country. It excluded the former Transkei, Bophuthatswana, Venda and Ciskei (TBVC states).

5 There was a change in the definition of work with the shift from the OHSs to the LFSs. Field workers were instructed to classify as employed anyone who was engaged in any informal or small-scale agricultural work even if for only an hour in the previous week (Neyens and Wittenberg, 2016; Casale et al, 2004).

6 We exclude the October Household Surveys because of the data quality issues afflicting the OHSs including the jump in labour force participation that was concentrated between 1999 and 2000. As discussed above, part of this jump has been attributed to better data collection and this might affect the within cohort trends. Additionally, restricting the sample to the September rounds of the LFSs and quarter three of the QLFSs controls for seasonality.

7 In this analysis the strict definition of the labour force participation is applied where an individual is said to be participating in the labour market if they are employed or unemployed but searching.

8 Own calculation from PALMS dataset.

9 The 2014 survey seems anomalous as female earnings suddenly increase between age 45 and 50. Wittenberg and Kerr (2019) analysing wage determination in South Africa notice a similar break in the most recent QLFSs and comment that the break stems from imputations done on the earnings variable by Statistics South Africa.

10 According to the 2010 Time Use Survey, South African men spend only 5 minutes per day on care of persons while women spend 29 minutes on care of persons (Budlender, 2019).

Additional information

Notes on contributors

Jacqueline Mosomi

JACQUELINE MOSOMI is a Post-Doctoral Fellow at the Southern African Labour and Development Research Unit (SALDRU). She holds a PhD in Economics from the University of Cape Town. Her work in SALDRU focuses on gender gaps in labour market outcomes within the Siyaphambili project. Her research interests include gender inequality, data quality, labour economics and education. Email: [email protected]