South–South migration and the labor market: Evidence from South Africa¶

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Giovanni Facchini; Anna Maria Mayda; Mariapia Mendola (2011). South–South migration and the labor market: Evidence from South Africa.


Type	working paper
Scope	Post-1994 South African economy
Method	econometric
Period studied	1996–2007
Regions	South Africa, Southern Africa, Gauteng, Free State, Mpumalanga
Themes	labour markets wages, mining migrant labour, demography urbanisation, transition post apartheid, education human capital, methods data sources
Citation key	`facchini2011`

Argument¶

Using the 1996 and 2001 censuses and the 2007 Community Survey, the paper estimates the effect of immigration on South African native men's labour market outcomes. It combines Card's spatial-correlation approach (56 districts) with Borjas's skill-cell approach (32 education-by-experience groups). It finds that rising immigration lowers native employment rates but has no significant effect on total income. The negative employment effect is strongest for medium- and highly skilled natives. Immigrants are shown to be at least as educated as natives, contrary to popular belief. Section 3 gives a short history of migration to South Africa, including contract mine labour under apartheid.

Evidence and method¶

IPUMS-International microdata from Statistics South Africa: 10% samples of the 1996 and 2001 population censuses (about 3.6 and 3.7 million individuals) and the 2007 Community Survey (about 1.1 million individuals). The sample is men aged 16-65 in the civilian labour force. The background history relies on secondary sources, chiefly Crush (2000).

Findings¶

Foreign-born share of the population rose substantially between 1996 and 2007. (p. 9)

in 1996 migrants represented 2.1 percent of the total population, whereas in 2007 they made up 2.94 percent of the total
Immigrants' share of the male labour force rose over the period. (p. 10)

the share of immigrants over the period grew from 4.6 percent in 1996 to 6.1 percent in 2007
Foreign-born men are more likely than native men to hold college degrees, and the gap widened. (p. 14)

in 2007 more than one out of ten foreign born males in the labor force had a college education, compared to one out of twenty natives
The benchmark estimate shows a large negative employment effect on natives. (p. 19)

an increase by 10 percentage points in labor supply in a skill group, brought about by immigration, leads to a 6.7 percentage points decrease in natives' total employment rate
Income effects are statistically insignificant, and the income measure cannot separate wages from hours. (p. 20)

the immigration shock in the South African labor market has been absorbed mainly through an adjustment in the number of domestic workers employed, rather than through a change in income earned.
The negative employment effect is larger for more skilled natives. (p. 21)

a ten percent increase in the share of foreign born is correlated with a 6.9 and 8.2 percent decline in the total employment rate respectively for natives who have completed a secondary and a college education
Foreign contract employment on the gold mines rose to a peak in 1970, then immigration fell from the early seventies. (p. 9)

Immigrant contract employment peaked in 1970 at approximately 265 thousand workers.
The apartheid state came to see black migration as a political threat, which reduced immigration from the early 1970s. (p. 9)

starting from the early seventies, immigration – both legal and illegal – decreased substantially, thanks both to a reduction in the demand for foreign workers by domestic businesses
Africa's share of migrants, especially from Mozambique, increased between 1996 and 2001. (p. 11)

Between 1996 and 2001 the share of foreigners originating in the continent increased by 3.1 percentage points, from 67.6 to 70.7 percent of the total.