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Unemployment in South Africa, 1995-2003: Causes, Problems and Policies

  • Geeta Kingdon
  • John Knight

This paper examines an issue of overwhelming importance in South Africa--unemployment and its rise. It explains the factors behind the sharp rise in unemployment in the post-apartheid period, investigates the role of labour legislation and the system of labour market governance, evaluates the impact of the government's active labour market policies, identifies the knowledge gaps about the functioning of the labour market and draws some policy prescriptions. It analyses unemployment using household surveys spanning 1995--2003 and explains the rise in unemployment by the slow growth of the economy, and thus slow growth in the demand for labour relative to the rapidly growing supply, together with labour market inflexibility. The paper argues that if unemployment is to be tackled, it is crucial to pursue a set of policies that promote South Africa's rate of economic growth to promote job-creation, and also that labour market regulations require reconsideration, giving greater weight to the concerns of employers and investors, and to the interests of the unemployed and informally employed poor who are beyond the reach of the labour institutions but can be hurt by them nevertheless. It highlights that lack of appropriate data hinders analysis of important aspects such as entry into, exit from and duration of unemployment. Finally, the paper appeals for investigation of how active labour market policies to address unemployment--such as public works programmes, skills training programmes etc., formulated largely in the absence of local evidence--have performed. Copyright 2007 The author 2007. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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File URL: http://www.gprg.org/pubs/workingpapers/pdfs/gprg-wps-010.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number GPRG-WPS-010.

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Date of creation: 01 Jan 2005
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Handle: RePEc:oxf:wpaper:gprg-wps-010
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  1. Geeta Gandhi Kingdon & John Knight, 2004. "Race and the Incidence of Unemployment in South Africa," Review of Development Economics, Wiley Blackwell, vol. 8(2), pages 198-222, 05.
  2. Anna McCord, 2004. "Policy Expectations and Programme Reality: The Poverty Reduction and Labour Market Impact of Two Public Works Programmes in South Africa," Working Papers 8, Economics and Statistics Analysis Unit (ESAU), Overseas Development Institute.
  3. Murray Leibbrandt & James Levinsohn & Justin McCrary, 2005. "Incomes in South Africa Since the Fall of Apartheid," NBER Working Papers 11384, National Bureau of Economic Research, Inc.
  4. Paul Lundall, 2003. "Sector Education Training Authorities and the Delivery of Training: Preliminary Remarks on the New Skills Dispensation in South Africa," Working Papers 03079, University of Cape Town, Development Policy Research Unit.
  5. Emanuela Galasso & Martin Ravallion & Agustin Salvia, 2004. "Assisting the transition from workfare to work: A randomized experiment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(1), pages 128-142, October.
  6. Daniela Casale, 2004. "What has the Feminisation of the Labour Market ‘Bought’ Women in South Africa? Trends in Labour Force Participation, Employment and Earnings, 1995-2001," Working Papers 04084, University of Cape Town, Development Policy Research Unit.
  7. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
  8. Alex Bryson & Richard Dorsett & Susan Purdon, 2002. "The use of propensity score matching in the evaluation of active labour market policies," LSE Research Online Documents on Economics 4993, London School of Economics and Political Science, LSE Library.
  9. Charles Meth & Rosa Dias, 2004. "Increases in poverty in South Africa, 1999-2002," Development Southern Africa, Taylor & Francis Journals, vol. 21(1), pages 59-85.
  10. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
  11. Moll, Peter, 1996. "Compulsory Centralization of Collective Bargaining in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 326-29, May.
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