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Graduate Unemployment in the Face of Skills Shortages: A Labour Market Paradox

  • Kalie Pauw
  • Morné Oosthuizen
  • Carlene van der Westhuizen


    (Development Policy Research Unit,University of Cape Town)

There is consensus among analysts that South Africa’s unemployment is structural in the sense that the unemployed generally possess lower skills than what is required in the marketplace. In the context of increasing demand for skilled workers due to technical progress and the need to become more competitive globally, graduate unemployment would be expected to fall. This paper investigates the nature of graduate unemployment in South Africa since 1995, finding that labour force and employment growth has been concentrated in higher educational categories. However, against expectations unemployment has risen amongst young and better educated people. The paper suggests that the education sector urgently requires continued emphasis and monitoring to ensure that learners are adequately prepared for entry into the labour force; that greater efforts be made to encourage learners to choose directions of study with superior employment prospects; and that investment in young people’s soft skills is required.

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Paper provided by University of Cape Town, Development Policy Research Unit in its series Working Papers with number 06114.

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Length: 36 pages
Date of creation: Nov 2006
Date of revision:
Publication status: Published in Working Paper Series by the Development Policy Research Unit, November 2006, pages 1-36
Handle: RePEc:ctw:wpaper:06114
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  1. Charlton Koen, 2003. "The Contribution of Technikons to Human Resources Development in South Africa," Working Papers 03080, University of Cape Town, Development Policy Research Unit.
  2. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09.
  3. Kalie Pauw & Lawrence Edwards, 2005. "Evaluating the general equilibrium effects of a wage subsidy scheme for South Africa," Working Papers 21, Economic Research Southern Africa.
  4. Rulof Burger & Ingrid Woolard, 2005. "The State of the Labour Market in South Africa after the First Decade of Democracy," SALDRU/CSSR Working Papers 133, Southern Africa Labour and Development Research Unit, University of Cape Town.
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