Quantifying Apartness in South Africa: A general equilibrium estimation of the impact or Labour Discrimination

The study develops and calibrates a static general equilibrium model to quantify the aggregate economic losses attributable to discriminatory labour market policies, specifically the ``job reservation" system. A counterfactual analysis reveals that eliminating these race-based frictions would have resulted in significant gains in aggregate output. A decomposition of this effect shows that the entire productivity cost of discrimination is attributable to a decline in allocative efficiency, not the technical efficiency of firm. This demonstrates that the primary cost was the prevention of workers from sorting into their most productive roles.