The Impact of Employment Protection on the Temporary Employment Services Sector in South Africa

ABSTRACT This paper uses administrative tax data to examine the impact of strengthening employment protection legislation in the temporary employment services (TES) sector in South Africa. The study uses a regression discontinuity design to investigate whether the 2015 amendments to the LRA had a causal impact on the employment, wages and contract duration of workers employed in the sector. The findings suggest limited impacts in the short‐term. There were no significant effects on worker transitions, and improved working conditions only for the relatively small group that did move out of the TES sector into the non‐TES sector after the reform.