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Estimating the Effects of South Africa's Youth Employment Tax Incentive – An Update

Author

Listed:
  • Vimal Ranchhod

    (SALDRU, School of Economics, University of Cape Town)

  • Arden Finn

    (SALDRU, School of Economics, University of Cape Town)

Abstract

Our previous study of the effects of South Africa's Employment Tax Incentive (ETI) (Ranchhod and Finn, 2014) found that the ETI did not have a statistically significant impact on youth employment probabilities in the first six months of 2014. In this update we extend the period of analysis from six months to all twelve months of 2014 and find that this does not alter our qualitative findings. These are that the ETI has not resulted in a statistically significant change in the probability of young people finding jobs, despite its cost of R2 billion over the first year of its existence. Furthermore, there is no evidence to suggest that the introduction of the ETI resulted in an increase in the level of churning for youth in the labour market.

Suggested Citation

  • Vimal Ranchhod & Arden Finn, 2015. "Estimating the Effects of South Africa's Youth Employment Tax Incentive – An Update," SALDRU Working Papers 152, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:wpaper:152
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    File URL: https://opensaldru.uct.ac.za/bitstream/handle/11090/785/2015_152_Saldruwp.pdf?sequence=1
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    Citations

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    Cited by:

    1. Amina Ebrahim & Murray Leibbrandt & Vimal Ranchhod, 2017. "The effects of the Employment Tax Incentive on South African employment," WIDER Working Paper Series 005, World Institute for Development Economic Research (UNU-WIDER).
    2. Haroon Bhorat & Robert Hill & Safia Khan & Kezia Lilenstein & Ben Stanwix, 2020. "The Employment Tax Incentive Scheme in South Africa: An Impact Assessment," Working Papers 202007, University of Cape Town, Development Policy Research Unit.
    3. Amina Ebrahim & Rebone Gcabo & Lilian Khumalo & Jukka Pirttilä, 2019. "Tax research in South Africa," WIDER Working Paper Series wp-2019-9, World Institute for Development Economic Research (UNU-WIDER).
    4. Bojosi Morule & Konstantin Makrelov, 2019. "The effectiveness of the Employment Tax Incentive August 2019," Occasional Bulletin of Economic Notes 9481, South African Reserve Bank.
    5. Amina Ebrahim & Murray Leibbrandt & Vimal Ranchhod, 2017. "The effects of the Employment Tax Incentive on South African employment," WIDER Working Paper Series wp-2017-5, World Institute for Development Economic Research (UNU-WIDER).
    6. Amina Ebrahim & Jukka Pirttilä, 2019. "Can a wage subsidy system help reduce 50 per cent youth unemployment?: Evidence from South Africa," WIDER Working Paper Series wp-2019-28, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Youth; unemployment; South Africa; wage subsidy; employment tax incentive;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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