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Job Creation and Destruction in South Africa

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  • Andrew Kerr
  • Martin Wittenberg
  • Jairo Arrow

Abstract

Analysts of the South African labour market have mainly used household surveys to analyse the labour market. It has been more difficult to explore the labour demand of firms, as a result of limited data availability. We use the Quarterly Employment Statistics survey, an enterprise survey conducted by Statistics South Africa, to explore how South African firms create and destroy jobs, thereby shedding light on many of the policy questions that are relevant in a high unemployment society like South Africa. We find that job creation and destruction rates are similar to those found in Organisation for Economic Co-operation and Development countries. There is little evidence that labour legislation creates rigidities that prevent firms from hiring or firing workers. We also find that larger firms are better net creators of jobs than small firms and that net job creation rates are negative in manufacturing. Our research has important policy implications – particularly for the South African National Planning Commission's 2030 plan, in which new jobs are envisaged to come mainly from small- and medium-sized firms. Our research suggests that this scenario is not likely without changes to policy or legislation.

Suggested Citation

  • Andrew Kerr & Martin Wittenberg & Jairo Arrow, 2014. "Job Creation and Destruction in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 1-18, March.
  • Handle: RePEc:bla:sajeco:v:82:y:2014:i:1:p:1-18
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    File URL: http://hdl.handle.net/10.1111/saje.12031
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    Cited by:

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    2. Isaacs, Gilad, 2014. "The myth of “neutrality” and the rhetoric of “stability”: macroeconomic policy in democratic South Africa," MPRA Paper 54426, University Library of Munich, Germany.
    3. Amina Ebrahim & Kezia Lilenstein, 2019. "Gender and the South African labour market: Policy relevant research possibilities using South African tax data," WIDER Working Paper Series wp-2019-31, World Institute for Development Economic Research (UNU-WIDER).
    4. Nicola Viegi, 2015. "Labour Market and Monetary Policy in South Africa," Working Papers 6607, South African Reserve Bank.
    5. Mulalo Mamburu, 2017. "Defining high-growth firms in South Africa," WIDER Working Paper Series wp-2017-107, World Institute for Development Economic Research (UNU-WIDER).
    6. Thomas Habanabakize & Daniel Francois Meyer & Judit Oláh, 2019. "The Impact of Productivity, Investment and Real Wages on Employment Absorption Rate in South Africa," Social Sciences, MDPI, vol. 8(12), pages 1-15, December.
    7. Andrew Kerr, 2018. "Job Flows, Worker Flows and Churning in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 86(S1), pages 141-166, January.
    8. Asmae Beladel & Radouane Raouf, 2022. "Impact assessment of job reallocation on unemployment in Morocco: An ARDL approach," African Development Review, African Development Bank, vol. 34(4), pages 500-512, December.
    9. Stephen Esaku, 2022. "Which firms drive employment growth in Sub-Saharan Africa? Evidence from Kenya," Small Business Economics, Springer, vol. 59(1), pages 383-396, June.
    10. Marlies Piek & Dieter von Fintel, 2020. "Sectoral minimum wages in South Africa: Disemployment by firm size and trade exposure," Development Southern Africa, Taylor & Francis Journals, vol. 37(3), pages 462-482, May.
    11. Bianca I Chigbu & Fhulu H Nekhwevha, 2022. "The extent of job automation in the automobile sector in South Africa," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 726-747, May.
    12. Mattie Susan Landman & Neave O'Clery, 2020. "The impact of the Employment Equity Act on female inter-industry labour mobility and the gender wage gap in South Africa," WIDER Working Paper Series wp-2020-52, World Institute for Development Economic Research (UNU-WIDER).
    13. Félix, Elisabete Gomes Santana & Belo, Teresa Freitas, 2019. "The impact of microcredit on poverty reduction in eleven developing countries in south-east Asia," Journal of Multinational Financial Management, Elsevier, vol. 52.
    14. Andrew Kerr, 2018. "Job Flows, Worker Flows and Churning in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 86(S1), pages 141-166, January.
    15. Nicola Viegi & Vincent Dadam, 2023. "Investigating unemployment hysteresis in South Africa," Working Papers 11043, South African Reserve Bank.
    16. Thomas Habanabakize & Paul-Francois Muzindutsi, 2017. "Analysis of Government Expenditure and Sectoral Employment in the Post-apartheid South Africa: Application of ARDL Model," Journal of Economics and Behavioral Studies, AMH International, vol. 9(2), pages 224-233.
    17. Chigbu, Bianca Ifeoma & Nekhwevha, Fhulu H., 2021. "The future of work and uncertain labour alternatives as we live through the industrial age of possible singularity: Evidence from South Africa," Technology in Society, Elsevier, vol. 67(C).
    18. Rahul Anand & Siddharth Kothari & Naresh Kumar, 2016. "South Africa: Labor Market Dynamics and Inequality," IMF Working Papers 2016/137, International Monetary Fund.
    19. Andres Fortunato, 2022. "Getting Back on the Curve South Africa’s Manufacturing Challenge," CID Working Papers 139a, Center for International Development at Harvard University.
    20. Andrew Kerr & Martin Wittenberg, 2019. "Earnings and employment microdata in South Africa," WIDER Working Paper Series wp-2019-47, World Institute for Development Economic Research (UNU-WIDER).
    21. Florian Leon & Samuel Monteiro, 2019. "Financial constraints, factor combination and Gibrat's law in Africa," Working Papers hal-02493343, HAL.
    22. Mulalo Mamburu, 2017. "Defining high-growth firms in South Africa," WIDER Working Paper Series 107, World Institute for Development Economic Research (UNU-WIDER).
    23. Charles Adams & Derek Yu, 2022. "Labour market trends in South Africa in 2009-2019: A lost decade?," Working Papers 03/2022, Stellenbosch University, Department of Economics.

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