Haroon Bhorat Development Policy Research Unit,

University of Cape Towne-mail: hbhorat@commerce.uct.ac.za

website: www.commerce.uct.ac.za/dpru/

Youth Employment Issues in Post-apartheid South Africa

Population of Working Age, 16-64: Labour Market Status by Age Cohort

Ratio of Number of Unemployed to Employed, By Age

Unemployment Rates, by Race, Gender and Location

Youth Unemployment Rates by Education Level

Proportion of Unemployed Who have or Have Not Worked Before, By Age

Category

Youth Employment Interventions in South Africa

• In SA Context: Youth employment strategy is national employment strategy.

• Large quantum of policy interventions aimed at youth employment

• Demand- and supply-side coupled with short- versus long-run.

Skills Development

• National Skills Development Strategy (NSDS)• Key Players: NSA; SETAs; NSF• Learnerships are medium for training Yue• Unit cost of training • Learnerships small proportion of total training

expenditure through NSDS• NSDS not centrally focused on the unemployed• Impact on employment creation arguably fairly

low.

Effect of SDA on Employment

0

10

20

30

40

50

60

70

80

Raise it 2.82 6.9 4.44 4.39

Lower It 14.08 11.49 14.44 13.48

No Effect 61.97 73.56 71.11 67.71

Not Familiar 14.08 6.9 5.56 9.72

50 - 99 workers

100 - 199 workers

200+ workers

Total

ePWPs

• Continuation of PWPs under the RDP• Expansion with aim of 1 million jobs over next five

years• Link into the National Youth Service Initiative• Government’s most high profile response to

unemployment crisis• Provision of public assets and services to poor• Suffers the standard difficulties of PWPs: high unit

cost of job ratios; minimal skills transfer; low long-run employment multipliers

Labour Market Information

• DoL has Labour Centres designed to narrow mismatch

• Info asymmetry not efficiently solved by state: hence substitute providers

• Example: SAGDA• Community Centres to access youth• Centres only as good as the quality of labour

supply

SMME Support

• Extends from entrepreneurship training to provision of finance

• Key player here: Umsombovu Youth Fund (UYF)

• Formal banking system not responsive, hence a substitute market created by state intervention

• 90% repayment rate • 10-20 000 loans provided thus far

Education for Employment

• Improvement of Schooling system in terms of resource access AND quality of outputs: Systemic Evaluation Results not encouraging

• Higher Education: not encouraging on number of ‘employability’ criteria

• FETs need to improve as exit options for early leavers.

Standardised Grade 3 School Tests, By Province: 2003

0

10

20

30

40

50

60

70

Nat E C FS GP Kzn MP NC LP NW WC

Numeracy

Life Skills

Literacy

Importance of Outside Training Sources

0

5

10

15

20

25

30

35

40

45

University 16.23 22.51

Business Partners (Other firms) 12.83 25.67

Government Institutes 12.43 22.7

Vocational/Technikons 33.51 24.23

Industry Training Boards 34.9 22.92

Private Training Schools 41.58 29.21

Most Important Moderately Important

Youth and Indirect Access to Social Security

Lessons and Impressions

• Exhaustive on institutions, frameworks: less so on implementation• Risk of institutional overlap • Emphasis on horizontal spread in policy?• High probability of not getting at most vulnerable of the youth• Importance of social security system as indirect source for poverty

alleviation amongst youth• Limited resources: Limit the Policy Focus• Mismatch between labour demand trends and ss charac. of youth• Elements of a ‘national public service’ as part solution for graduate

unemployed are apparent• Ultimately, the long-run solution is all- inclusive and higher growth

levels

Constraints on Growth

• Labour Market Constraints

• High concentration ratios (notably in financial and banking services)

• High Incidence of Violent Crime

• Challenge of Income Inequality (social instability)

• User cost of capital high relative to other LDCs