ERSA Research Brief - Rising unemployment in post-apartheid South Africa: temporary or

ERSA Research Brief August 2015 Rising unemployment in post-apartheid South Africa: temporary or persistent? Dieter von Fintel and Rulof Burger1 The fact that South Africa’s high unemployment rate continued to rise during the first decade after the political transition - and this despite the same period coinciding with the economy’s longest business cycle upswing – suggests that the labour market. [...] Why is this important, and what are the implications? “Youth” unemployment of the current generation (which is among the highest internationally) may not only be a problem of the young being unable to find suitable jobs at the start of their careers, but may transpire into a “middle aged” unemployment problem as this same generation ages, with the same problems persisting. [...] In particular, they were subject to changes in education policies that intended to reduce the burden of over-age learners on the struggling education system: the implication is that these particular groups exited the education system (without being integrated into FET colleges, as intended), added to the pool of job seekers, but lacked the skills to actually be employable. [...] Additionally, the skills component required of workers has grown faster than they have been acquired – economists refer to this as skill-biased technological change, which is a long-run shift to the types of employment and production that favour the best skilled in society. [...] This consideration is salient, should the generational disadvantage primarily be the product of a low quality school system through which this generation passed: in that case, wage subsidies can do little to correct a deeper skills deficit that is increasingly important to solve in the context of a skills hungry economy.