TY  - RPRT
        AU  - Kerr, Andrew
AU  - Teal, Francis J.
        TI  - The Determinants of Earnings Inequalities: Panel Data Evidence from South Africa
        PY  - 2012/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6534
        UR  - https://www.iza.org/publications/dp6534
        AB  - In this paper we analyse the relative importance of individual ability and labour market institutions, including public sector wage setting and trade unions, in determining earnings differences across different types of employment. To do this we use the KwaZulu-Natal Income Dynamics Study data from South Africa, which show extremely large average earnings differentials across different types of employment. Our results suggest that human capital and individual ability explain much of the earnings differentials within the private sector, including the union premium, but cannot explain the large premiums for public sector workers. We show that a public sector premium exists only for those moving into the public sector. The paper addresses the challenges of non-random attrition and measurement error bias that panel data bring. Our results show that emphasising a simple binary dichotomy between the formal and informal sector can be unhelpful in attempting to explore how the labour market functions.
        KW  - earnings
KW  - public sector
KW  - trade unions
KW  - formality
KW  - South Africa
        ER  -