Identifying the Wage Differential in the Temporary Employment Services Sector: Evidence for South Africa using Administrative Tax Records

Although the temporary employment services (TES) or labour broker sector has been growing in recent decades, and there has been much heated public debate on whether the jobs offered constitute 'decent work', there has been little empirical research on this sector in developing countries. I...

Full description

Saved in:
Bibliographic Details
Published in:The Journal of development studies 2022-10, Vol.58 (10), p.2065-2088
Main Authors: Cassim, Aalia, Casale, Daniela
Format: Article
Language:English
Subjects:
administrative data
Archives & records
Developing countries
Employment agencies
Income taxes
Inequality
Job characteristics
Labor market
LDCs
Panel data
Research methodology
South Africa
Stock brokers
Taxation
Temporary employment
Temporary employment services
Wage differential
wage differentials
Wages & salaries
Work
Workers
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Although the temporary employment services (TES) or labour broker sector has been growing in recent decades, and there has been much heated public debate on whether the jobs offered constitute 'decent work', there has been little empirical research on this sector in developing countries. In this paper, we use a unique administrative panel dataset based on income tax records for the period 2011-2015 in South Africa, to explore the wage and benefits differentials between TES and non-TES workers. We find a substantial gross wage differential of around 88 per cent, which remains high at 34 per cent even after accounting for worker fixed effects and controlling for the individual and job characteristics available in the data. We also show that TES workers are much less likely to report benefit contributions than non-TES workers, and when they do, their contributions as a percentage of the gross wage are on average much lower than among non-TES workers. These results add substance to the arguments that TES workers are in a more precarious position than non-TES workers, and that this form of employment contributes to high levels of labour market inequality in South Africa.
ISSN:0022-0388
1743-9140
DOI:10.1080/00220388.2022.2094252