South African unemployment : a supply side analysis of the labour market

Bibliography: leaves 81-85.This study of South African unemployment approaches the problem from the supply side of the labour market. A descriptive analysis of South African unemployment is made first of all, using data from the 1995 October Household Survey. This is followed by a discussion of various important elements of the South African unemployment debate. An introduction to some theoretical and econometric considerations around labour supply modelling is then given, leading into a statistical and econometric analysis of the African labour supply decision using OHS 1995 data. In particular the labour supply process is split into three stages - participation, ability to find employment, and hours - and each stage analysed in detail using appropriate techniques, including probit and Tobit models for dichotomous and censored dependent variables. In terms of participation, wages are found to have a considerably larger association with female participation than with that of males, and non-wage income shows a very small negative relationship for both groups. Education is found to have a much larger influence on the ability of female participants to find employment than males, and the ability for males to find employment is strongly associated with aspects of location. In particular, the Eastern Cape and Northern Province are identified as regions where the chances of participants finding employment are greatly reduced. Finally, overall labour supply elasticities are found to be positive and inelastic for both males and females of the African population group