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Market Failure, Human Capital, and Job Search Dynamics in South Africa: The Case of Duncan Village

  • Patrick Duff
  • David Fryer


    (Department of Economics and Economic History, Rhodes University)

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    This paper argues that the economic literature on unemployment and poverty in South Africa has under-explored potentially important feedback mechanisms which, because they serve to change the structure of labour markets and affect human capital trajectories, serve to endogenise labour market exclusion. Using a tailor-made database from Duncan Village, East London, this paper probes such processes, focussing around the question of job search. The evidence presented suggests that endogenous factors generating labour market exclusion are important in locking-in exclusion, and suggests that macro-micro linkages need to be further considered.

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    File Function: First version, 2005
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    Paper provided by University of Cape Town, Development Policy Research Unit in its series Working Papers with number 05098.

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    Length: 35 pages
    Date of creation: Sep 2005
    Date of revision:
    Publication status: Published in Working Paper Series by the Development Policy Research Unit, September 2005, pages 1-35
    Handle: RePEc:ctw:wpaper:05098
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    3. Akerlof, George A & Yellen, Janet L, 1985. "Unemployment through the Filter of Memory," The Quarterly Journal of Economics, MIT Press, vol. 100(3), pages 747-73, August.
    4. Nicoli Nattrass, 2003. "Unemployment and AIDS: The Social-Democratic Challenge for South Africa," SALDRU/CSSR Working Papers 043, Southern Africa Labour and Development Research Unit, University of Cape Town.
    5. Akerlof, George A & Main, Brian G M, 1981. "An Experience-Weighted Measure of Employment and Unemployment Durations," American Economic Review, American Economic Association, vol. 71(5), pages 1003-11, December.
    6. Anne Case & Motohiro Yogo, 1999. "Does School Quality Matter? Returns to Education and the Characteristics of Schools in South Africa," NBER Working Papers 7399, National Bureau of Economic Research, Inc.
    7. Antoni Calvó-Armengol & Matthew O. Jackson, 2004. "The Effects of Social Networks on Employment and Inequality," American Economic Review, American Economic Association, vol. 94(3), pages 426-454, June.
    8. Ana M. Ferrer & W. Craig Riddell, 2002. "The role of credentials in the Canadian labour market," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 879-905, November.
    9. Anne Case & Angus Deaton, 1999. "School Inputs And Educational Outcomes In South Africa," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 1047-1084, August.
    10. Williamson, Oliver E, 1981. "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1537-68, December.
    11. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    12. Duflo, Esther, 2004. "The medium run effects of educational expansion: evidence from a large school construction program in Indonesia," Journal of Development Economics, Elsevier, vol. 74(1), pages 163-197, June.
    13. Screpanti, Ernesto & Zamagni, Stefano, 1995. "An Outline of the History of Economic Thought," OUP Catalogue, Oxford University Press, number 9780198774556.
    14. Thomas Hertz, 2003. "Upward Bias in the Estimated Returns to Education: Evidence from South Africa," American Economic Review, American Economic Association, vol. 93(4), pages 1354-1368, September.
    15. David Fryer & Désiré Vencatachellum, 2003. "Returns to Education in South Africa: Evidence from the Machibisa Township," Working Papers 03076, University of Cape Town, Development Policy Research Unit.
    16. David Fryer & Désiré Vencatachellum, 2004. "Coordination Failure and Employment in South Africa," Working Papers 04086, University of Cape Town, Development Policy Research Unit.
    17. JW Fedderke & Martine Mariotti, 2002. "Changing Labour Market Conditions In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 70(5), pages 830-864, 06.
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