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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Unemployment and reservation wages in working-class Cape Town
Authors:Nattrass, NicoliISNI
Walker, Richard
Periodical:South African Journal of Economics
Geographic term:South Africa
working class
urban areas
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2005.00034.x/pdf
Abstract:Are the unemployed in South Africa 'pricing themselves out of the labour market'? This paper explores this proposition through an analysis of reservation wages - i.e. the highest wages at which people would rather 'choose leisure' or continued job search rather than work - in Cape Town's working class district of Khayelitsha/Mitchell's Plain (KMP). It uses data from a representative survey of the KMP district conducted in 2000-2001 among 1176 households and 2644 adults. The survey covered the predominantly coloured area of Mitchell's Plain and the African townships of Khayelitsha, Gugulethu and Langa. The paper argues that reservation wages are not out of line with predicted wages. This, in turn, suggests that unemployment in the area is not attributable to job seekers having unrealistically high reservation wages. Rather, it appears that people's reservation wages are realistic given what they could expect to earn in the labour market. Bibliogr., notes, sum. [Journal abstract]