ECS2601
ASSIGNMENT 2
DUE DATE: 7 APRIL 2026
, ECS2601 ASSIGNMENT 2 2026
DUE 7 APRIL 2026
QUESTION 1
1.1 Briefly explain the factors that led to the rise in women's workforce
participation in South Africa over the past three decades.
This can be explained by microeconomic factors affecting labour supply, as outlined in
the study guide (Learning Unit 14, p. 109) and the textbook (Pindyck & Rubinfeld, 2009:
Chapter 14).
Changes in Real Wages and the Substitution Effect: An increase in the real wage
rate for women makes the opportunity cost of not working (leisure) higher. This
creates a substitution effect, encouraging women to substitute work for leisure. As
the wage rate increases, the quantity of labour supplied increases, moving along
the labour supply curve (Study Guide, Learning Unit 14, p. 109; Pindyck &
Rubinfeld, 2009: 531-533).
Income and Substitution Effects: For many women, the substitution effect of higher
potential wages has dominated the income effect. As the higher income could lead
to a preference for more leisure (backward-bending supply), the initial increase in
market wages provided a strong incentive to enter or re-enter the workforce.
Changes in Non-Labour Income and Household Structure: The economic necessity
to support households, particularly in a context of high unemployment and changing
ASSIGNMENT 2
DUE DATE: 7 APRIL 2026
, ECS2601 ASSIGNMENT 2 2026
DUE 7 APRIL 2026
QUESTION 1
1.1 Briefly explain the factors that led to the rise in women's workforce
participation in South Africa over the past three decades.
This can be explained by microeconomic factors affecting labour supply, as outlined in
the study guide (Learning Unit 14, p. 109) and the textbook (Pindyck & Rubinfeld, 2009:
Chapter 14).
Changes in Real Wages and the Substitution Effect: An increase in the real wage
rate for women makes the opportunity cost of not working (leisure) higher. This
creates a substitution effect, encouraging women to substitute work for leisure. As
the wage rate increases, the quantity of labour supplied increases, moving along
the labour supply curve (Study Guide, Learning Unit 14, p. 109; Pindyck &
Rubinfeld, 2009: 531-533).
Income and Substitution Effects: For many women, the substitution effect of higher
potential wages has dominated the income effect. As the higher income could lead
to a preference for more leisure (backward-bending supply), the initial increase in
market wages provided a strong incentive to enter or re-enter the workforce.
Changes in Non-Labour Income and Household Structure: The economic necessity
to support households, particularly in a context of high unemployment and changing
