Unions and the Gender Wage Gap in South Africa

Abstract

Studies of the wage effects of unions in South Africa have been concerned largely with the impact of union membership on the wages of African and white male workers. Consistent with findings in the international literature, these studies have concluded that unions compress the distribution of wages in South Africa, and more specifically, that racial inequality is lower in the union sector than in the non-union sector. In this paper, we explore whether unions in South Africa are associated with comparable gender wage effects among African workers, using data collected in the nationally representative Labour Force Surveys. Contrary to initial expectations, we find that when wage estimations control for broad occupational sorting by gender in union and non-union employment, then the gender wage gap is larger in the union sector than in the non-union sector. We also consider how possible selection into union status affects our estimates, and demonstrate the difficulty of addressing this problem in the South African context by evaluating a variety of selection models.