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Emigration to South Africa's Mines

Literature › Works

Robert E. B. Lucas (1987). Emigration to South Africa's Mines. The American Economic Review, Vol. 77, No. 3. American Economic Association.
Type journal article
Scope Economics and economic history of apartheid
Method econometric
Period studied 1946–1978
Regions South Africa, Botswana, Lesotho, Malawi, Mozambique, South African homelands
Themes mining migrant labour, labour markets wages, agriculture land, bantustans removals influx, business and state, methods data sources
Citation key lucas1987

Argument

Lucas builds a simultaneous econometric model of labour migration to South Africa's mines from five supplying areas. The model also covers crop output, cattle herds and, for Malawi and Mozambique, estate labour markets. Migration responds positively to the mine-versus-home expected wage gap, so the region was never an infinitely elastic labour reserve for the mining houses. Emigration cuts crop output in the short run, which rejects a simple surplus-labour view, but migrants' earnings raise crop productivity and cattle holdings in the long run (Lesotho is the exception). Emigration also raises plantation and estate wages in Malawi and Mozambique, which sets sending-country employers against the mines. This conflict explains state interventions such as quotas, forced labour, Malawi's 1974 ban and South Africa's homeland relocations.

Evidence and method

Annual time series, 1946-1978, compiled from national archives, statistical offices, ministries of agriculture and university libraries in Botswana, Lesotho, Malawi and South Africa. Variables are mine employment, mine and domestic wages, crop output and value, rainfall, cattle numbers, fertilizer sales, tobacco-grower numbers and estate employment. Capital stocks are built from capitalized wage and crop incomes. A detailed data appendix is available from the author on request. Sources cited include Vail and White on Mozambique and Christiansen and Kydd on Malawi.

Place in the debates

Findings

  • Mine employment was a very large share of young male populations in the main supplying countries around 1970. (p. 2)

    the stock of men employed in the South African mines relative to the dejure male population ages 18 to 35 exceeded 80 percent for Lesotho, was close to 50 percent for Botswana, and about 15 percent even for Mozambique

  • After 1974 the mining houses shifted recruitment toward domestic South African workers, so the foreign market no longer ran along its supply curve. (p. 3)

    from 1974 onwards, the South African mining houses, acting in concert through their centralized recruiting agency, exercised a preference for domestic workers

  • Malawi suspended mine recruitment in April 1974, an extreme state intervention in the labour supply. (p. 6)

    In April 1974, the government of Dr. Hastings Banda suspended further recruitment of miners.

  • Forced relocation to the homelands created a pool of unemployed South Africans, so from 1978 mine recruiters had excess domestic applicants. (p. 9)

    The program of compulsory internment in the homelands has generated a massive pool of unemployment

  • Unskilled black industrial wages were far above mine wages, which shaped the labour supply choices of South African miners. (p. 9)

    Even unskilled blacks' wages in industry are far above those of miners.

  • Miners respond to wage differentials, so the region was not an infinitely elastic labour reserve; this is why recruiting was centralized. (p. 10)

    Clearly, southern Africa has not been a labor reserve for the mining houses, in the sense of infinite elasticity of labor supply

  • Crop production estimates reject the surplus-labour theory: more wage employment reduces crop output holding population constant. (p. 12)

    reject a simple labor surplus theory; the negative coefficients estimated on the employment variables indicate that increased wage employment

  • Migrant wages raise rural productivity in the long run while reducing output in the short run. (p. 13)

    it appears that wage income of migrants can enhance the working or fixed capital available to the traditional, rural sector, raising productivity in the longer run while in the short-run reducing output.

  • Portugal profited from Rand recruitment through a secret deferred-pay arrangement, a gain that explains why it tolerated recruiting despite higher plantation wages. (p. 14)

    returned to Mozambique, was retained by Portugal in the form of gold at a premium price.

  • Malawi's 1974 ban raised estate employment and lowered estate wages, but absorbed only half of the displaced miners. (p. 15)

    The result was almost an 80 percent rise in estate employment by 1978, and a 15 percent drop in the real wage of estate workers in the first two years after the cutoff.

  • Malawi's lifting of the ban in 1977 came too late: South Africa no longer trusted it as a labour source. (p. 16)

    was lifted in June 1977, but by then South Africa no longer trusted Malawi as a source and the number of mine workers from Malawi has never recovered

Evidence ledger

Sources used

Source Kind Period How used
Annual time-series data compiled for Botswana, Lesotho, Malawi, Mozambique and South Africa, 1946-1978 (mine employment, wages, crop value/output, cattle, rainfall, population, estate/plantation employment and wages) author survey or fieldwork 1946-1978 Supplies all variables for the simultaneous equations estimating mine migration, crop output, cattle herds and estate/plantation labor markets.
Botswana National Archives, Central Statistics Office, Ministry of Agriculture, University Library state archives 1946-1978 Locations where Botswana data series were found for the time-series model.
Lesotho National Archives and Bureau of Statistics state archives 1946-1978 Source of Lesotho data on miners, wages and crops (crop data only for occasional years in colonial period).
Malawi National Archive Library, National Statistical Office, University Library at Zomba state archives 1946-1978 Source of Malawi series on recruits, quotas, estate labor, tobacco growers, maize sales, fertilizer, ADMARC purchases.
South African Department of Statistics and Meteorological Office data official statistical series 1946-1978 Provides South African wage, employment, crop, cattle and rainfall series and mine wage data.
Population censuses around 1970 for labor-supplying countries population census c.1970 (with intercensal trends) Establishes the stock of miners relative to de jure male population aged 18-35, and intercensal trends used to interpolate population and wage series.
Announced Nyasaland/Malawi quotas versus recorded new recruits official statistical series 1946-1964 and later Comparison of quotas with recruits identifies years when quotas were binding, which are excluded from supply estimation.
TEBA/mining-house recruiting and wage data (mine wage, miner numbers, white miners' wages, mineral prices) chamber of mines or recruiting records 1946-1978 Provides numbers of miners by country and nominal mine wages; wages of white miners and mineral prices serve as instruments.
Lucas (1985a), 'Mines and Migrants in South Africa', AER secondary literature compilation to 1974+ Prior study establishing that after 1974 mining houses preferred domestic workers and exercised monopsony power, justifying treatment of post-1974 recruitment as quota-determined.
Vail and White (1980), Capitalism and Colonialism in Mozambique; 1942 Portuguese circular secondary literature compilation 1930s-1960s Source for the 1942 circular requiring six months' work per year and for the characterization of Mozambican labor markets and Portuguese policy.
International Labour Organization (1962) Report on Portuguese observance of the Abolition of Forced Labour Convention commission or official report 1950s-1962 Documents continued forced labor for 'vagrants' through the 1950s, supporting the forced-registration dummy variable.
1961 Portuguese decrees altering compulsory employment legislation gazette 1961 Date for ending the forced-registration period in the dummy variable (through 1961).
Christiansen and Kydd (1983) on Malawian labour and the 1974 suspension secondary literature compilation 1974-1977 Supports claims that suspension was planned before the plane crash and that South Africa no longer trusted Malawi as a source after 1977.
Case-study literature on migration, wage income and agriculture (Kerven 1983; Cobbe 1982) secondary literature compilation 1980s Corroborates the econometric finding on wage earners and crop/cattle productivity, and the Lesotho soil erosion exception.
South African legislation: Master and Servants law, Section 10 rights, ban on TEBA recruiting in White Farm Areas legislation gazette to 1978 Institutional features shaping model specification (desertion ban, Section 10 preference, recruitment restrictions).

New data

Author compiled annual 1946-1978 time series for five labor-supplying economies (miners, mine and domestic wages, crop output/value, cattle herds, rainfall, population, estate employment and wages) from archives and statistical offices during field travel; itemization available only in an appendix on request.

Inference

Quantification: Econometric (causal design).

Simultaneous-equation econometric model estimated on annual country time series (1946-1978) with OLS, instrumental variables and autoregressive corrections; separate equations for mine labor supply, crop production, cattle herds and estate labor, supplemented by institutional narrative and secondary literature.

Key claims

Claim Basis Strength
Miner numbers respond positively to the expected wage differential between mine and home, so southern Africa is not an infinitely elastic labor reserve. (p. 321) Table 1 regressions on country time series (mine wage, expected home wage, crops, rainfall, population). Partial data
Labor withdrawal for wage or mine work reduces crop output in the short run, rejecting a simple labor surplus view. (p. 323) Table 2 crop production functions with negative coefficients on employment/population. Partial data
Accumulated migrant wages raise crop productivity and cattle herds in the long run, except in Lesotho. (p. 323) Tables 2 and 3 using constructed capitalized wage series (assumed depreciation rates) for Botswana, Malawi and South Africa. Partial data
Recruiting for the Rand mines raised plantation/estate labor costs and reduced employment in Mozambique and Malawi. (p. 325) Table 4 estate labor demand/supply and wage equations using mine labor numbers. Partial data
Forced labor and registration in Mozambique increased the propensity to migrate to the mines and held down plantation wages before 1962. (p. 323) Dummy variable for forced registration in Tables 1 and 4, informed by Vail and White and ILO reports. Partial data
The 1974 suspension of Malawian recruiting raised estate employment by almost 80 percent by 1978 and cut estate real wages about 15 percent in two years. (p. 326) Descriptive before/after comparison of Malawian estate employment, wages and ADMARC purchases. Illustrative or anecdotal
Portugal gained from mine recruitment through port-traffic guarantees, a recruiting tax and a secret compulsory deferred-pay clause retained as gold at a premium. (p. 325) Asserted from agreements with South Africa; no document cited beyond Vail and White quotation. Asserted

The author's caveats

Notes that no capital stock series exist, so capital is proxied by capitalized wage and crop income with assumed depreciation; no time-series data on nonagricultural self-employment; construction employment and Mozambican crop output unavailable (proxies used); Lesotho crop data exist only for occasional years and wage data are missing for early years; data sources cannot be itemized in the paper. Also notes collinearity in Malawi and weaker significance in some equations.

Gaps in the evidence

The paper never itemizes its underlying documents, so data quality and series construction (e.g., real mine wages, crop values, cattle numbers) cannot be checked; small samples (13-31 observations) and constructed capital stocks with assumed depreciation limit identification of the long-run effects. Household-level survey data on remittance use and farm investment, or TEBA/Chamber of Mines recruitment records by district, would test the mechanism directly; some such records existed at the time and are in archives today. The Portuguese-South African agreements and the secret deferred-pay clause need archival treaty or bank documentation.

Replicability: Data poorly documented.