Youth Unemployment and the Labour MarketPresented 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 email@example.com
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.
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”
Unemployment by Education (2012)Challenges include:• 280 000 “unemployed graduates”• 4,5 million unemployedSource: QLFS, First Quarter, 2012
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
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 programmesCan we wait for these bigger changes before we do something? Can “the something” help to make the bigger changes.
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?