Context: the South African Labour Market
Characterized by the world's highest unemployment rates and persistent effects of historical social segregation, the South African labor market presents a particularly challenging context.
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Characterized by the world's highest unemployment rates and persistent effects of historical social segregation, the South African labor market presents a particularly challenging context.
Last updated
This review is a work in progress. We will update it continuously with the latest research to date.
At 33% as of 2024 Q1, South Africa has the highest unemployment rate in the world, with the rates doubling (61%) for youth aged 15-24. This is an unequal crisis on multiple dimensions. Rates are overwhelmingly higher among the Black African population (36%), followed a far second colored population (23%). Women face a 13% higher likelihood of unemployment than men.
Over three million young people in South Africa are not in employment, education or training (NEET). The same patterns of unequal outcomes persist: These individual who are NEET are particularly vulnerable to
5+ years. Low enrolment rates in tertiary education (25.2% as of 2021), is a key factor behind this widespread and persistent unemployability of youth. The lack of tertiary education is further compounded by the apartheid legacy of legal discrimination and segregation that generated large wealth and spatial inequalities across the country. This means, for many of these already disadvantaged jobseekers, available jobs are also located prohibitively far away.
Together, these factors characterize a labor market facing a vast disconnect between labor demand and labor supply sides. On the supply side, a large pool of jobseekers struggle to signal their skills to prospective employers and face inherently high search costs due to socioeconomic and spatial inequalities. On the demand side, firms appear uncertain about the quality of the applicants they attract with . This in turn leads to firms relying on trial-and-error recruiting tendencies, creating insecure entry level jobs.
. Job search support interventions have proven useful in improving employment outcomes. Studies have tested and found positive results for job search support through 1) behavioral encouragement interventions such as , social support; 2) better utilization of job search platforms such as and 3) endorsement mechanisms such as and. When implemented at scale, better job search infrastructure has the potential to bridge the gap between what firms need versus what jobseekers can offer through increased visibility of the labour market and pathways within it for both sides.
Spatial mismatches between jobs and jobseekers, combined with high search costs, further deepen inaccurate beliefs about the job market among youth. Overly optimistic beliefs about the job market lead to young jobseekers under searching and holding out for "better jobs". On one hand, , but these search efforts do not necessarily translate to better employment outcomes on average.
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