The waiting game : a survival analysis of unemployment duration in South Africa 2001-2004

Includes bibliographical references.Who faces the worst labour market prospects in South Africa? To answer this pertinent question I will use panel data from the biannual Labour Force Survey composed by Statistics South Africa, to estimate time spent unemployed by respondents. Survival analysis is then used to untangle the characteristics and determinants of unemployment duration based on several variables characterising the demographic, geographic and educational diversity of the South African labour force. Results from the analysis support a ranking model of unemployment, as proposed by Blanchard and Diamond (1990), with divergent unemployment exit rates between high and low ranked work seekers. The ranking given to a given educational level is found to be strongly related to race, indicating that individuals from non-"model-C" schools face inferior labour market conditions. There is also some evidence that a willingness to work in the informal sector raises the probability of transitioning out of unemployment amongst individuals with less than a completed secondary education