Skills shortages in South Africa: A literature review. Policy Research Unit

Abstract This paper conducts a review of the literature on skills shortages in South Africa. It is demonstrated that different Government departments have different views concerning the 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. An important example of this is that the link between this training is very poorly administered, highlighting poor co-ordination between the Department of Labour and Department of Education. Among Sectoral Education and Training Authorities (SETAs), there is also under-performance on their mandate to because of the strong public good nature to this activity and the fact that only SETAs are institutionally empowered to effect this change. A variety of policy recommendations are made with respect to both closed-and open-economy solutions to skills shortages. A key point is that immigration legislation must be relaxed in order to help solve the pervasive skills constraints in South Africa