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Does technological growth destroy jobs and exacerbate wage inequality in middle income countries?

January 19, 2022

  Joel Gondwe, Rulof Burger, Janneke Pieters

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*The views expressed here do not necessarily represent those of IDRC or its Board of Governors. This work was carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada. 

 

This policy brief summarises findings from a research paper on changes in the South African labour market over the period 1997 to 2015. Specifically, we investigate whether the South African labour market experienced the same “hollowing out” or polarisation due to technological change as developed countries, whereby the share of middle-skilled (and highly routinised) jobs decreased, resulting in relative increases in both low- and high-skilled jobs. We find evidence that this did occur, and that there were differences in the movement of workers by race and gender.

Importantly, the document finds that black workers and women were more likely to move to low-skilled occupations, while workers from the other race groups and men were more likely to move into high-skilled jobs. We interpret this as the result of apartheid-era labour market discrimination, a schooling system which fails to transfer adequate skills to black learners, and persistent discriminatory practices and structural inequalities by race and gender.

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