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Duration of unemployment in youth transitions from schooling to work in Cape Town

Author

Listed:
  • Cecil Mlatsheni

    (School of Economics, University of Cape Town)

  • Murray Leibbrandt

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

Abstract

The transition from school to work marks the beginning of the labour market experience of youth. If smooth and efficient, it can be a springboard to a successful career. However, it often is not a smooth transition and youth can be trapped in unemployment for relatively long periods. This paper makes use of a youth panel data set, the Cape Area Panel Survey (CAPS), which is rich in information about job search and timing of employment to illuminate the issue of youth transition to the labour market. Utilising month-by-month calendar entries, we are able to chart detailed labour market activity of youth in Cape Town. Following this, the nature and degree of duration dependence in the Cape Town labour market is examined using survival analysis. Furthermore, we examine whether the hazard of exiting the unemployment state is positive, negative or constant. Economic theory suggests that where the unemployment rate is very high, duration dependence should be negative, meaning that the likelihood of exiting a state of unemployment decreases with the length of the unemployment spell. The reasoning behind this postulation is that in an environment of high unemployment, the discouraged worker effect is prevalent, and it is likely that workers will decrease their search intensity or resort to a more passive means of job search. These factors could serve to decrease the exit probability of the unemployed.

Suggested Citation

  • Cecil Mlatsheni & Murray Leibbrandt, 2015. "Duration of unemployment in youth transitions from schooling to work in Cape Town," SALDRU Working Papers 159, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:wpaper:159
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    File URL: https://opensaldru.uct.ac.za/bitstream/handle/11090/792/2015_159_Saldruwp.pdf?sequence=1
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    References listed on IDEAS

    as
    1. Pieter Serneels, 2002. "Explaining Non-Negative Duration Dependence Among the Unemployed," CSAE Working Paper Series 2002-13, Centre for the Study of African Economies, University of Oxford.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    youth; unemployment; schooling; cape area panel study;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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