PhD Research

This paper provides causal evidence on the impact of incorporation on the labour supply of self-employed workers, as well as their spouses. It does so by exploiting regulation changes at the province-profession level that were introduced to permit the registration of professional corporations in Canada. Among other benefits, corporations acts as a tax shelter to professionals, reducing their current marginal tax rate and increasing their lifetime wealth. My results suggest that incorporation leads to an increase in labour supply, consistent with the reduction in marginal tax rate. However, the increase in female labour supply is four-fold that of men. Incorporation is also associated with a 50 %-point increase in the likelihood that a female professional has employees, relative to 14 %-points for men. Incorporation therefore encourages small business owners to take on the risk of employees, which could be the mechanism through which labour supply is then increased. Preliminary results using annual taxable income data suggest these reforms increased female earnings relative to male earnings, thereby reducing gender inequality among self-employed professionals.

This paper extends the DiNardo, Fortin, and Lemieux (1996) study of the links between labor market institutions and wage inequality in the United States and updates the analysis to the 1979 to 2017 period. A notable extension quantifies the magnitude and distributional impact of spillover effects from minimum wages and unions, also known at the union threat effect. A distribution regression framework is used to estimate both types of spillover effects separately and jointly. Accounting for spillover effects doubles the contribution of de-unionization to the increase in male wage inequality and raises the explanatory power of declining minimum wages to two thirds of the increase in inequality at the bottom end of the female wage distribution.

NOTE: Unfortunately this project has been placed on hold due to Covid-19 travel restrictions that have prevented us from accessing secure survey data housed at DataFirst, University of Cape Town, South Africa.

This project investigates the hypothesis that the low levels of self-employment and informal sector activity in contemporary South Africa can be linked to the legacy of labour recruitment in South Africa’s gold mining industry. At the outset of the Witwatersrand gold rush (1886) labour was largely sourced from outside of South Africa: Southern Mozambique, Botswana, even China. However, during the early 1900’s a series of events culminated in the expansion of recruitment to African men within South Africa. These events included the collapse of the Witwatersrand Native Labour Association (WNLA) as a centralized recruitment agency, the decision by the Transvaal government to repatriate around 30,000 Chinese workers, and a recession in the Cape province which led the governor to encourage recruiters to expand their operations to the Cape’s ‘native reserves’. We combine historical recruitment data with contemporary, geo-coded survey data to estimate the long run impact of the centralized mining recruitment on contemporary self-employment. Our research design exploits the historical borders of districts selected for recruitment, as well as the historical location of private sector recruiters prior to the re-establishment of a monopsony in 1918.