Skills shortages in South Africa: a literature review

Skills shortages in South Africa: a literature review

What can be done to improve the skills shortage problem in South Africa?

This paper conducts a review of the literature on skills shortages in South Africa. The focus is directed to the interrelationships between labour demand and supply, where supply refers to the individuals who participate in the labour market with given endowments of human capital, and labour demand refers to the private and public entities that employ individuals.

Different government departments have different views concerning the definition of skills shortages. This is largely due to the omission in any official government literature of tying the concept of “skills shortages” to productivity. There is also a complex and frequently overlapping institutional architecture that undermines the effective administration of skills development.

A variety of policy recommendations are made with respect to both closed and open economy solutions to skills shortages. These include:

• training for the unemployed is a public good in the classic sense, which means that the market is unlikely to provide it, so the state must take the lead in this regard
• it is important for training programs to be linked into the National Qualifications Framework (NQF) for non professional workers. This is the key to upgrading the skills set of low and semi-skilled workers
• both closed and open economy solutions to the problem of skills shortages are necessary in South Africa.

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