Social and Behavioral Sciences Commons^™

Would More Skills Raise Demand For Those Who Do Not Get Them? Evidence From South African Manufacturing, Alberto Behar

Alberto Behar

Policy makers claim a shortage of skills is constraining output and that a rise in skill supply would benefit less skilled occupations in South Africa. This assumes/implies skilled and unskilled labor are complements. To test the claim, this paper estimates Hicks Elasticities of Complementarity and elasticities of factor price with manufacturing data. Aggregate estimates suggest white collar labor complements blue collar labor, so a rise in skill supply would lead to a rise in demand for less skilled labor. Disaggregated results show skilled/artisanal and unskilled labor are complements while semi-skilled and unskilled labor are substitutes.