Articles by Gilad Isaacs

Predicting the impact of a national minimum wage: are the general equilibrium models up to the task?

Gilad Isaacs, University of Witwatersrand
reads 9,912

This article analyses whether computable general equilibrium (CGE) models are suitable for projecting the likely consequences of implementing a national minimum wage. Referring to modelling exercises undertaken by the National Treasury and the Development Policy Research Unit (DPRU), it shows that their projection of a strongly negative impact on employment and other macroeconomic indicators is a direct result of the architecture and assumptions of these models. By design these models preclude alternative outcomes; this renders them rather unsuitable as guides to policymaking.

The national minimum wage debate: looking beyond a narrow focus on labour markets

Gilad Isaacs, University of Witwatersrand
reads 10,795

Most contributions to the debate on a national minimum wage adopt a narrow view of labour markets and accept that the structure of the economy will remain essentially as it is. We question both of these assumptions. Further, we argue that a national minimum wage, at a level to be determined through careful research, must be part of a well-designed package of longer-term policy reforms that look beyond the labour market and support employment growth through investment.