R4D Project: Employment effects of different development policy instruments
General Overview
The Swiss Programme for Research on Global Issues for Development (r4d programme) is being implemented jointly by the Swiss Agency for Development and Cooperation (SDC) and the Swiss National Science Foundation (SNSF). The joint programme supports relevant research for development aimed at solving global problems in poor countries.
For more details on the r4d programme, please visit the official website, here.
Background
Three interlinked mechanisms are crucial for development: (A) Technological Upgrading, (B) Integration into International Markets and (C) Restructuring Labour Markets. Little is known about why and under what conditions the three mechanisms being studied generate (or fail to generate) more and better employment.
Aim
This project aims to provide new empirical insights and theoretical perspectives by combining different scientific disciplines and research methods such as quasi-experimental methods, econometric analysis of micro and macro datasets, semi-structured interviews with key actors (field research), and sociological and legal analysis of policies and regulations. It will increase our understanding of which policies lead to development processes that are sustainable from the point of view of growth processes, business logic and societal values (e.g. distribution, poverty).
Relevance
The project is expected to contribute to scientific progress in the fields of development studies, economics, law, sociology and industrial relations. The project will help national and international policymakers and stakeholders by providing summaries of baseline studies, country programmes and comparative analyses of various policy instruments in terms of their ability to generate employment, thereby adding to development strategy discussions and policy making. See here for the research output of the R4D project on Employment Effects posted on the World Trade Institute (WTI) website.
Duration
Duration: 6 years
Start of project: 1.2.2014
Geographic scope
- Bangladesh
- Ethiopia
- Ghana
- Madagascar
- South Africa
- Vietnam
Coordinators and partnerships
Country coordinators
- Prof Dr Thomas Cottier, World Trade Institute, University of Bern, Switzerland
- Prof Dr Lucio Baccaro, University of Geneva, Switzerland
- Dr Marion Jansen, World Trade Institute, University of Bern, Switzerland
- Prof Dr Selim Raihan, University of Dhaka, Bangladesh
- LL.M Dr Shiferaw Kebede Abdi, Hawassa University, Ethiopia
- M.LITT Abena Frempoma Daagye Oduro, University of Ghana, Ghana
- Dr Faly Hery Rakotomanana, Institut National de la Statistique, Madagascar
- MA Volker Schoer, University of the Witwatersrand, South Africa
- Dr Nguyen Thu Thuy, Foreign Trade University, Vietnam
Overall project coordinators (Switzerland)
- Dr Doris Anita Oberdabernig, World Trade Institute, University of Bern, Switzerland
- Dr Ruya Gokhan Kocer, University of Geneva, Switzerland
South African Research Project: Round 1 (2014-2016)
South African Research Team
Project Coordinator:
Volker Schoer (AMERU, University of the Witwatersrand)
Researchers:
Prof. Paul Benjamin (IDLL, Univeristy of Cape Town & WSG, University of the Witwatersrand)
Prof. Lawrence Edwards (SALDRU, University of Cape Town)
Wayde Flowerday (AMERU, University of the Witwatersrand)
Prof. Neil Rankin (ReSEP, Stellenbosch University)
Gareth Roberts (AMERU, University of the Witwatersrand)
South African Research Agenda 2014-2016
The key aim of the first set of papers in the first R4D project period (2014 - 2016) will be to establish changes in the regulatory and competitive environment in which South African firms have to decide on their production, employment and sales strategies. In particular, the first three papers will show how the regulatory environment changed and how these changes are related to labour market outcomes, firm characteristics and firms’ decision to engage with the global economy. The second set of papers (due in the second round of the R4D project from 2017 to 2019) will explore firms’ responses to global competition and greater labour market regulation by investigating, for instance, the increased casualization of labour through outsourced production into the informal economy, arm length labour relations via labour brokering and changing sales strategies into less competitive markets like the regional market.
Paper 1 (2014):
The aim of this report is to provide an overview of the economic developments and trends in South Africa since the first democratic elections with a focus on the changing structure of production and employment in the South African economy. Against the backdrop of the various policy frameworks implemented by the South African government to affect the quantity and quality of employment, this paper analyses sectoral shifts in production and employment, changes in firm characteristics and overall trends in labour market outcomes.
Paper 2 (2015):
This paper explores the shifts in labour market regulation and legislation in South Africa from 1994 onwards, and investigates the impact of one particular labour market policy – the Employment Equity Act of 1996 - on employment and production strategies of South African firms. Using the fact that the Employment Equity Act is also a size dependent regulation which applies to firms of 50 employees and more, the paper proposes a Regression Discontinuity Design (RDD) approach to investigate the impact of the Employment Equity Act on firm dynamics for firms that fall just around the policy threshold.
Paper 3 (2016):
This paper will investigate the anatomy of thriving and failing firms in terms of size, sector, employment strategy and investment behavior when facing changes in employment regulation. The third paper is the most data intensive paper in the three year period and requires that we build a database of Bargaining Councils and their decisions through extracting information from government gazettes. Wages and working conditions agreed upon by Bargaining Councils vary by coverage of the council, by region and by job description. The paper will exploit three aspects of variation to identify the effect of Bargaining Councils on employment and wages: first, regional variation in coverage (Bargaining Councils set different wage levels between rural and urban areas, and some areas are covered by Bargaining Councils and some not); second, time variation (different Bargaining Councils have rounds of collective bargaining at different times); and third, variation in wage levels for different occupations within a Bargaining Council (different occupational levels have different set wages for different sectors and these do not correspond across sectors). This variation, and the changes which occur after different rounds of collective bargaining, can then be used to examine whether these agreements are associated with wage outcomes, employment levels and employment by different sizes of firms.
For the full research agenda, please click here.