South African Labour Market Transitions Since the Global Financial and Economic Crisis: Evidence from two Longitudinal Datasets

This paper studies individual labour market mobility and its determinants in South Africa since 2008 using two large, nationally representative longitudinal datasets: a set of 2-year panels based on the National Income Dynamics Study (NIDS) and quarter-to-quarter matched Quarterly Labour Force Survey (QLFS) cross-sections. We find considerable mobility in the South African labour market, with men and women transitioning in and out of employment and between different forms of employment and non-employment, both in the short and medium run. Our econometric analysis shows that at least part of this mobility is explained by demand-side factors outside of individuals’ direct control. Matric or post-matric level education and, to some extent, older age increased workers’ job security, above and beyond the influence of other, job-related variables. Higher education also helped individuals find jobs, independent of their initial labour market status and earlier work experience. On the whole, our findings suggests that in South Africa labour market segmentation manifests itself through selective rather than indiscriminate rigidities: higher-educated and/or more experienced labour market participants more easily break through the barriers to entry into the most valued jobs and, once there, benefit more from downward rigidity in the labour market than others. We further show how, following the global financial and economic crisis, short-term labour market mobility gradually decreased and segmentation became somewhat less selective on the level of education.