IESET.
Hypotheses·labour·labour_reform_south_africa_2018_national_minimum_wage

South Africa's 2018 National Minimum Wage Act (R20/hour effective 2019-Q1) did not produce a measurable employment- rate decline relative to a synthetic control of upper-middle- income peers despite its high minimum-wage-to-median ratio (~62%), but raised real wages at the bottom decile by at least 8% by 2022.

PARTIALengine/runs/labour_reform_south_africa_2018_national_minimum_wage

PARTIAL — mean_gap=+22.69, |gap|/pre_sd=24, p_perm=0.125; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When minimum wages rise high relative to normal local pay, do lower-skill workers keep their jobs, or does hiring fall at the margin?

plain answer

The evidence is suggestive but not decisive. mean_gap=+22.69, |gap|/pre_sd=24, p_perm=0.125; claim direction ambiguous

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 8 country or place units from 2010 to 2023, using a synth did design, with fixed effects for country and year.

what was measured
What changed
  • South africa nmw 2019
What we checked
  • Employment to population ratio
  • Bottom decile real wage index
  • Unemployment rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_reform_south_africa_2018_national_minimum_wage
1007550250201020172023ZAFBRAMEXCOLTURARGMYS
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show employment_to_population_ratio across 8 sampled countries over 2010–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_reform_south_africa_2018_national_minimum_wage. Published chart will be generated from engine/runs/labour_reform_south_africa_2018_national_minimum_wage/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-04-30T10:15:31Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

South Africa's 2018 National Minimum Wage Act (R20/hour effective 2019-Q1) did not produce a measurable employment- rate decline relative to a synthetic control of upper-middle- income peers despite its high minimum-wage-to-median ratio (~62%), but raised real wages at the bottom decile by at least 8% by 2022.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED (modest minimum-wage view) if synth-DiD gap on South African employment rate is not statistically more negative than -1.0 pp at p<0.10 AND bottom-decile real- wage gap > +8.0% by 2022. REFUTED if employment gap < -2.0 pp at p<0.10 (high-bite disemployment confirmed) OR if bottom-decile wage gap < +3.0% (binding-but-evaded enforcement failure).

formal test & threshold
test:      Synth-DiD on South African employment rate and bottom- decile real wage 2019-2022 vs upper-middle-income donor pool, placebo permutation at p<0.10.

Method

Template
synth_did
Fixed effects
country, year
Clustering
country
Sample
8 countries · 2010 – 2023
Evidence type
associational

Data

VariableSourceTransform
employment_to_population_ratio
outcome
world_bank_wdi:SL.EMP.TOTL.SP.ZStier 2
level
bottom_decile_real_wage_index
outcome
oecd:DSD_EARNtier 2
log
unemployment_rate
outcome
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
south_africa_nmw_2019
treatment
constructed:indicator for 2019-Q1 NMW effective datetier 5
indicator
gdp_per_capita_real
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
terms_of_trade_index
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_reform_south_africa_2018_national_minimum_wage

Verdict: PARTIAL — mean_gap=+22.69, |gap|/pre_sd=24, p_perm=0.125; claim direction ambiguous

Pre-registration

  • Claim: South Africa's 2018 National Minimum Wage Act (R20/hour effective 2019-Q1) did not produce a measurable employment- rate decline relative to a synthetic control of upper-middle- income peers despite its high minimum-wage-to-median ratio (~62%), but raised real wages at the bottom decile by at least 8% by 2022.
  • Falsification rule: SUPPORTED (modest minimum-wage view) if synth-DiD gap on South African employment rate is not statistically more negative than -1.0 pp at p<0.10 AND bottom-decile real- wage gap > +8.0% by 2022. REFUTED if employment gap < -2.0 pp at p<0.10 (high-bite disemployment confirmed) OR if bottom-decile wage gap < +3.0% (binding-but-evaded enforcement failure).

Synthetic-control estimate

  • shape: synth_did
  • treated_country: ZAF
  • event_year: 2018
  • n_donors: 7
  • donor_weights (top): {'ARG': 0.858, 'MEX': 0.142, 'BRA': 0.0, 'COL': 0.0, 'TUR': 0.0}
  • pre_rmse: 18.150484052409567
  • pre_period_sd: 0.9574394423222214
  • mean_post_gap: 22.692848741792716
  • end_period_gap: 26.43800651972271
  • post_period_years: [2018, 2023]
  • placebo_p_value: 0.125
  • n_placebos: 7
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (outcome, n=8106)
  • world_bank_wdi:NY.GDP.PCAP.KD → gdp_per_capita_real (controls, n=14131)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, n=10779)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:31+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Treatment dated 2019-Q1 (effective date). South Africa's NMW is one of the highest minimum-to-median ratios in the world and is therefore a clean test of the high-bite-ratio disemployment claim. COVID overlap is a major concern; donor pool absorbs common shock.

Authored framework. Read the transparency note.