Job Market Paper
Misallocation and manufacturing productivity during Apartheid South Africa
In the 20th century, manufacturing emerged as a dominant force in South Africa’s economy, coinciding with the institutionalisation of Apartheid policies that entrenched racial discrimination in labor markets. Under Apartheid, skilled jobs were reserved for white workers, while African workers were relegated to unskilled roles. To address the resulting shortage of skilled white labor, firms deconstructed complex tasks into simpler units, enabling compliance with discriminatory laws while expanding industrial productivity. This paper examines the interplay between rail infrastructure improvements and productivity during this period, focusing on how railroad enhancements influenced aggregate productivity and allocative efficiency in manufacturing. The analysis provides a pseudo-test of Becker’s theory of discrimination by assessing whether economic forces counteracted Apartheid labor policies.
Using digitized regional manufacturing census data from 1970, 1980, and 1985, along with regional output data and geospatial railroad maps, this study investigates the impact of transitioning railroads to diesel and electric systems. Recognizing the potential endogeneity of infrastructure upgrades, a straight-line instrument connecting major cities is employed to isolate exogenous variation in railroad improvements. The results reveal that railroad enhancements significantly increased both productivity and allocative efficiency, suggesting that economic imperatives posed a challenge to discriminatory labor practices. Robustness tests with varying definitions of outcome and treatment variables support these findings. This study underscores how internal economic dynamics, alongside international pressure, threatened the sustainability of Apartheid-era policies.
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On the job market in 2025
Work in progress/Working papers
Race-biased technological change in industrial South Africa
Growth in 20th Century South Africa cannot be fully explained without considerations of the legacy of Apartheid. It is a period that saw the establishment of the union of South Africa around a strong mineral resource foundation of the economy. It is also a period that saw the expansion and domination of the manufacturing industry. The dynamics of growth in the 20th century South Africa are thus significantly affected by the interaction of its factors amidst government policies and restrictions on labour. In this paper, I estimate the production functions for Mining and manufacturing in South Africa to account for their evolution during the century. I further estimate elasticities of substitution between White and Black labour as well capital and Aggregate labour, to decompose Aggregate technical change’s contribution to output growth by labour type and capital. While technical efficiency was important for manufacturing, it was not as important in Mining. A racial wage premium wedged by Apartheid policies did affect Black worker’s efficiency and contribution to output growth. I quantify these effects in this paper.
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