Immigrant Special Visas and Local Employment: evidence from South African metropoles

Working Paper 915

Abstract

This paper sought to investigate why immigrant special permits can have different impacts on the local employment outcomes in locations within the same country. The paper specifically investigated the association between the Zimbabwe Exemption Permit (ZEP) and local employment outcomes and formalization of foreign labour in Cape Town and eThekwini, cities in South Africa that have different industrial specializations and labour demand. Bivariate maps and the event study model were used to investigate whether the increase in the foreign employment share was at the expense of local employment and whether the ZEP reinforced old spatial structures or new patterns emerged to suggest the formalization of foreign labour. The Ordinary Least Squares (OLS) interaction model was used to investigate the association between foreign employment and local employment in the CBD and along transport corridors as well as changes to the local person living at the average distance from the CBD and the main transport corridors. The results show that ZEP was associated with formalization of labour and a lot of complementarities between local and foreign labour in eThekwini and Cape Town, although in Cape Town, local labour lost jobs to immigrants in the CBD in 2018.