Unemployment, education and skills constraints in post-apartheid South Africa

Unemployment, education and skills constraints in post-apartheid South Africa

Skills of South African workers do not match the labour market demands

The supply of skilled labour in South Africa cannot meet labour demands. This paper investigates the relationship between education and unemployment in post-apartheid South Africa, and examines whether employment growth has been inhibited by skills constraints. It focuses on the period 1995 to 2003.

Key findings include: 

• the probability of unemployment was reduced as education increased
• among Coloured (South African mixed-race) and Indian men, and particularly women, the relative benefits of higher education increased significantly and considerably
• the relative benefits of higher education among African and white women declined
• the most obvious skill lacking in the labour force is work experience
• crime and theft, corruption and currency volatility are the main contstraints for firm expansion.

To remedy high unemployment rates, the authors underscore the importance of focusing on factors that inhibit an increase in the demand for labour.

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