Essays on Labor Market Outcomes in South Africa

The first paper examines the labor market effects of the largest AIDS treatment program in the world. I use geographic and temporal variation in the program rollout to identify the causal impact of the program. I find that for men the likelihood of labor force participation and employment both rise after an AIDS treatment clinic opens less than 15 miles away, but there are no discernible effects for women. Over time, as a greater proportion of the population begins receiving treatment, labor force participation falls and employment rises for both men and women. These results demonstrate that AIDS treatment is undersupplied if the positive employment effects are not taken into account. The second paper, co-authored with James A. Levinsohn, Olive Shisana and Khangelani Zuma, uses two econometric methods based on the propensity score to estimate the causal effect of HIV status on employment outcomes in South Africa. This paper provides the first nationally representative estimates of the impact of HIV status on labor market outcomes for southern Africa. We find that being HIV-positive is associated with a seven percentage point increase in the likelihood of being unemployed. In absolute value, this is of the same magnitude as the advantage conferred by having completed high school compared to having no education. Despite high unemployment rates, being HIV-positive confers a disadvantage and reinforces existing inequalities in South Africa. The third paper examines whether a negative shock to household employment and the corresponding fall in the reservation wage leads unemployed household members to resume job search or obtain employment. I find that men are more likely to increase search activity following a negative employment shock to the household, but only more likely to obtain employment 12-18 months after a negative shock or when the household experiences two consecutive shocks. There is no change in labor force participation for women, however, they are more likely to obtain employment 12-18 months after a negative shock. Gender-specific social networks also appear to play a role in obtaining employment. My results present evidence that structural and frictional factors constrain household responses to negative shocks.Ph.D.Public Policy & EconomicsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/77769/1/zmclaren_1.pd