The Impact of the National Minimum Wage in South Africa: Early Quantitative Evidence

The final row of the table, which shows the ratio of the median wage to the NMW, is instructive in this respect. [...] In particular we would expect to see movement in the distribution that is to the left of the vertical line, for the waves in the post-law period. [...] To reiterate, the treatment group consists of workers who earn less than the NMW and the comparison group consists of workers who earn more than 10 percent above the NMW, but not more than 50 percent above the NMW.8 Given that our focus is on the impact of the law introduced between waves 4 and 5 we construct the panel such that all individuals in the sample are employed in 2018Q4 and must be pres. [...] The time dummy, ‘Post’, reports the change in real wages in the post-law period, relative to the pre-law period, for the full sample of workers in the panel. [...] 4.3 Explaining the Results: Initial Reflections Perhaps the most surprising observation from the descriptive and econometric results above is the limited effect of the NMW on the wage distribution, given the level at which it is set and the number of workers it covers.