ESTIMATING THE SUBSTITUTABILITY OF AFRICAN AND WHITE WORKERS IN SOUTH AFRICAN MANUFACTURING, 1950–1985

In this paper I estimate the elasticity of substitution between African and white workers in the South African manufacturing industry during Apartheid. I find that the elasticity of substitution remained fairly high despite changes in the technology used in manufacturing, despite changes in the allocation of jobs to African and white workers, and despite the increasing skill differential between white and African workers. The elasticity of substitution for production workers declined from 9.81 in 1950 to 4.64 by 1985. This result shows that African and white workers were substitutes throughout Apartheid notwithstanding legislation restricting the types of jobs that African workers could do.