Youth unemployment and labour market participation in Southern Africa

IDE Research Bulletin

March 2016

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This research project was funded by IDE between the Fiscal Year 2014 and 2015, and conducted by Seiro Ito (IDE) and Rulof Burger (Stellenbosch University). The purpose of the project was to find out the correlates of unemployment and understand the mechanism behind it. To this end, multiple waves of field survey was conducted to construct a panel data set in townships of Western Cape, South Africa. In the initial wave, we have randomly sampled 620 youths, aged 20 to 35, from two urban townships near Cape Town. In the subsequent wave, we followed up 420 respondents from one township.

During the course of project, we have produced three background papers. Two are theoretical papers motivated by field observations and collected data, one on job search and another on elicitation of three dicounting factors. Third paper is empirical analysis on job turnover and employment spells. As a backdrop to background papers, we report that the youth unemployment rates to be high: 52% for males and 56% for females. We also noted that educational achievement reaching matriculation does not affect the job market status in a statistically significant way, but being in an early (older) cohort does. This reconfirms the doubts cast in policy arena that having matriculation diploma is no longer advantageous in labour markets.