The Impact of Immigration on the Labour Market: Evidence from South Africa.

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The Impact of Immigration on the Labour Market: Evidence
from South Africa.
BY
OMAZULU SIBADA
A dissertation submitted in fulfillment of the requirements for the degree of Master of Commerce in Economics.
DEPARTMET OF ECOOMICS
FACULTY OF MAAGEMET AD COMMERCE
UIVERSITY OF FORT HARE
SUPERVISOR: PROFESSOR M CUBE
OVEMBER 2008
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DECLARATIO & COPYRIGHT
I, the undersigned Nomazulu Sibanda, hereby declare that this dissertation is my own original work and that it has not been presented at any other University for a similar or any other degree award.

……………………………………
Signature
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Date
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ACKOWEDGEMETS
The financial assistance of National Research Foundation (NRF) towards this research is hereby acknowledged. Opinions expressed and conclusions arrived at are those of the author and are not necessarily to be attributed to the funders. I also thank my supervisor Professor M. Ncube who showed unfailing confidence in my work. l would like to thank my friends for assisting and supporting me. My last gratitude goes to Miss Mbali Dube for her patience, support and confidence in me.

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DEDICATIOS
This dissertation is dedicated to Miss Mbali Dube for her outpouring love and support. v
Acronyms and Abbreviations
DTI - Department of Industry and Trade
GDP -Gross Domestic Product
ASGISA-Accelerated and Shared Growth Initiative for South Africa OLS- Ordinary Least Squares
SARB- South African Reserve Bank
ECT-Error Correction Term
ECM- Error Correction Model
DW-Durbin Watson
SE-Standard Error
ILO-International Labour Organisation
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Abstract
The impact of immigrants on the labour market in the South African context has always been a long standing issue with both government and natives’ fearing for the latter’s displacement effect, pressure on wages and resources. Migrants are blamed for poor labour market conditions of a host country. Literature reviewed from Africa and elsewhere shows that migrants have negative outcomes on the host country’s labour market. For this study an Error Correction Model on time series data from 1980-2006 has been estimated. The study estimated two models that is the unemployment and the wages models. The variables used for estimation are immigration, inflation and the Gross Domestic Product. The study surprisingly found a positive impact of immigrants on wages but the effect on employment was negative and significant. It is important to note here that the calculated impact is only for the documented immigrants the impact the illegal ones is not known.

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Table of Contents
CHAPTER 1........................................................................................................................ 1 1.1 Introduction ................................................................................................................... 1 1.2 Statement of the Problem.............................................................................................. 4 1.3 Objectives of the Study ................................................................................................. 5 1.4 Hypothesis of the Study ................................................................................................ 5 1.5 Significance of the Study .............................................................................................. 5 1.6 Organisation of the Study.............................................................................................. 6 CHAPTER 2........................................................................................................................ 7 An Overview of Immigration trends in South Africa ......................................................... 7 2 .1 Introduction .............................................................................................................. 7 2.2 Migration: A Historical Overview ............................................................................ 8 2.3 Structure and...
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