1. Youth Unemployment and the Labour Market
Presented at “Economic Justice for the Next Generation”, Sunnyside Park Hotel, 16
August 2012
Hosted by the Institute for Justice and Reconciliation
Ebrahim-Khalil Hassen
http://zapreneur.com
editor@zapreneur.com

2. Youth Unemployment
• A question - If one is young and unemployed with the
passage of time, does one become older and employed?
Rulof Burger and Dieter von Fintel (2009), provides an important contextual argument.
The results of this study suggest that age is not necessarily the defining factor in South
African unemployment, but that the risks of being part of a particular generation of entrants
could be more decisive. If only age were important, the life cycle decline in unemployment
would eventually alleviate the worst of the problem, suggesting that policy should be
geared towards speeding up this transitional phase. The potential solutions geared at
youth would only require short-lived intervention, such as the proposed wage subsidy
(Banerjee et. al., 2006). However, if particular generations are affected severely by high
unemployment, it may be that this disadvantage follows these groups throughout their
working lives.

3. Long Term Unemployment (2008-2012)
• Structural nature of
unemployment
– More longer term
unemployment
– More discouraged workers
(increase of above a million
since 2008)
– Requires more than
dealing with “market
imperfections” and
“candidate imperfections”

4. Source: QLFS, First Quarter, 2008 and 2012

5. Unemployment by Education (2012)
Challenges include:
• 280 000 “unemployed graduates”
• 4,5 million unemployed
Source: QLFS, First Quarter, 2012

6. Signposts of a strategy
• Focused on providing “some income” to stabilise
communities – e.g. work seekers grant
• Entry and starting point
– Vocational training
– Public employment
• Community Works Programme
• Public sector internships
– Asset bundle (e.g. matched savings)
• Linked into wider economic strategy, with formal or
informal opportunities created

7. What does it mean for “Mzansi”?
• Intervention programmes
– Community Works Programme as a single major intervention
– Expansion of public sector internship programme focussed on
unemployed youth
– Provide social grants targeted to young and unemployed
– Significant expansion of the FET sector
– Youth entrepreneurship programmes
– Longer term – create savings accounts for CSG recipient
– Monitor impacts of growth, infrastructure and trade and industrial
programmes
Can we wait for these bigger changes before we do something? Can “the something”
help to make the bigger changes.

8. The Operational Questions
• Much of this exists already (budgets, personnel) but
questions remain:
– Will interventions matter without “structural changes” in the
economy?
– Will capacity in the public service be improved to deliver on
programmes, especially educational reforms?
– Can interventions aimed at unemployment find budget
commitments, especially a wage seekers grant?
– Can a bolder set of economic interventions be quickly put in
place to support youth employment, like the infrastructure
investment programme?