Research paper · policy article ·
Econ3x3
South Africa faces unemployment and deindustrialisation. Manufacturing tariff cuts in the 1990s were expected to reallocate workers into services. Our research finds the opposite: municipalities with larger tariff cuts experienced weaker employment growth in manufacturing and services. Wages did not adjust â the shock was absorbed through job losses. Negative spillovers from manufacturing constrained services from absorbing displaced workers; they either exited the labour force or migrated to other municipalities.
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