Legacy of Apartheid: Misallocation of Labour and Firm Productivity

Description

This presentation by Talent Nesongano, Carol Newman, John Rand and Marvin Suesse from SA-TIED, examines how apartheid-era labour market restrictions continue to shape economic outcomes in South Africa. It focuses on the long-term effects of policies that limited occupational and geographic mobility – such as job reservation, minimum wages, and spatial controls – and asks whether these historical constraints still influence how workers are allocated across firms and regions today.

Drawing on firm-level and administrative data alongside historical records, the study finds that these legacy effects persist, contributing to ongoing labour misallocation in affected sectors and districts. The findings suggest that, despite post-apartheid reforms, structural distortions remain embedded in the labour market, pointing to the need for more targeted policy interventions to improve the efficient allocation of labour.