Haroon Bhorat

1
Youth Employment Issues in Post-apartheid South
Africa
Haroon Bhorat Development Policy Research Unit,
University of Cape Town e-mail
hbhorat_at_commerce.uct.ac.za website
www.commerce.uct.ac.za/dpru/
2
Population of Working Age, 16-64 Labour Market
Status by Age Cohort
3
Ratio of Number of Unemployed to Employed, By Age
4
Unemployment Rates, by Race, Gender and Location
5
Youth Unemployment Rates by Education Level
6
Proportion of Unemployed Who have or Have Not
Worked Before, By Age Category
7
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.

8
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.

9
Effect of SDA on Employment
10
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
• Governments 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

11
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

12
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

13
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.

14
Standardised Grade 3 School Tests, By Province
2003
15
Importance of Outside Training Sources
16
Youth and Indirect Access to Social Security
17
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

18
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