Bibliography

An operational guide to the estimation of the economic opportunity cost of labour in South Africa

In most countries the goal of job creation is of paramount political importance. From an economic perspective, however, the benefit of job creation by a project is measured by the amount that the wage bill exceeds the economic opportunity cost of the labour employed. Unlike the economic opportunity cost of capital and the economic cost of foreign exchange, no single national parameter can be estimated for the economic opportunity cost of labour (EOCL). The EOCL varies by occupation, by skill level, by working environment, by labour market condition, and by region. This paper develops a framework with examples that serve as a guide for the estimation of the EOCLs across a range of circumstances typical of South Africa. Section 1 gives an overview of the labour market in South Africa, followed by the methods of estimating the EOCL. In section 2, the estimation of the EOCL is illustrated for three cases and then the results are presented of the EOCLs for various types of workers under different employment, taxation and labour market conditions. Bibliogr., notes, ref. [ASC Leiden abstract]

Title: An operational guide to the estimation of the economic opportunity cost of labour in South Africa
Author: Biak, Hasan Ali
Year: 2004
Periodical: South African Journal of Economics
Volume: 72
Issue: 5
Pages: 1056-1067
Language: English
Geographic term: South Africa
External link: https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2004.tb00144.x/pdf
Abstract: In most countries the goal of job creation is of paramount political importance. From an economic perspective, however, the benefit of job creation by a project is measured by the amount that the wage bill exceeds the economic opportunity cost of the labour employed. Unlike the economic opportunity cost of capital and the economic cost of foreign exchange, no single national parameter can be estimated for the economic opportunity cost of labour (EOCL). The EOCL varies by occupation, by skill level, by working environment, by labour market condition, and by region. This paper develops a framework with examples that serve as a guide for the estimation of the EOCLs across a range of circumstances typical of South Africa. Section 1 gives an overview of the labour market in South Africa, followed by the methods of estimating the EOCL. In section 2, the estimation of the EOCL is illustrated for three cases and then the results are presented of the EOCLs for various types of workers under different employment, taxation and labour market conditions. Bibliogr., notes, ref. [ASC Leiden abstract]