Addressing the Challenge of Youth Unemployment in South Africa

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Addressing the challenge of youth unemployment in South Africa

Presentation to a World Bank seminar Dr. Miriam Altman Executive Director Centre for Poverty Employment & Growth HSRC or May 5, 2010

Government commitment
• Government has committed to reducing unemployment by half between 2004 and 2014 – from 28% to 14% • HSRC estimated this would require the creation of avg 500,000 net new jobs annually • This average was reached prior to the downturn • With the downturn, and approximately 900,000 jobs lost, avg of 700,000 net new jobs pa needed to reach target by 2014

Centre for Poverty, Employment & Growth HSRC
• CPEG operates a modified think-tank asking: how can target unemployment be reached? • Draws together key stakeholders and experts into high level dialogue • Prepares deep research and develops capability to answer these policy questions

Youth focus
• • • • Over the past few years, we have developed a special focus on youth. Special focus on very large group of young people who leave school, are unemployed and not studying, and are not qualified to study in higher education. The long term solutions will focus on labour absorbing growth and improved education systems. In the meantime, SA has a youth bulge, and about 500,000 to 700,000 school leavers enter the labour market each year (in a LM of about 16 million people, and 12 million employed). Up to the downturn that hit SA in 2009, high school leavers (whether completed or not) had a 50/50 chance of finding a job before the age of 24. About 65% of black school leavers could not find a job before age 24. Out of the group of 4.2 million 15 – 24 year olds, about 2.6 million are inactive (neither working, nor studying) and 1.6 m are working.

• Are there immediate solutions that could raise the employability of school leavers, thereby reducing the probability of long term unemployment?

Some background
• S African youth stay in school long, but gain insufficient skills and capabilities relative to their counterparts in international comparative studies (TIMMS and SACMEC). They also lack networks, search skills, communication skills, personal presentation and work readiness capabilities Increasingly, they need to find work in a growing services economy that requires these capabilities The longer unemployment or underemployment lasts, the harder it is to reverse effects on the individual • • 25% of all UE have been searching for 1-3 years; 35% have been searching for 3+ years

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81% of discouraged have less than completed secondary education. Strong race dynamic Youth face a special challenge of accessing a first work experience There is a particular racial bias to these gaps.

Use of networks to find a job
• • • Best way to find job is through networks But few African youth workseekers use this approach For eg. Khayelitsha/Mitchell’s Plain and CAP Surveys found that: • 55% of respondents found their current job through friends & relatives • • LFS (2005) shows that only 10% of those aged 15 – 30 use networks to find job This has specific race dynamic, as African youth less likely to have networks that will help them find a job • • Age 17: more than half whites have worked in past year, vs 1% of african females & 7% african males (Lam et al, 2007). Age 20: more than 88% of whites worked in past year, vs. 20% African females & 31% African males

Youth unemployment after the downturn
• Approx 770,000 jobs lost in last year (Q3 2008 to 2009)
• Of which 570,000 (74%) were 15 – 34 yrs
• 14% of 15 – 24 year olds lost their jobs (down to 1.4 m working) • 7 % of 25 – 34 year olds lost their jobs (down to 4.3 m working) • Their unemployment rate did not rise much as discouragement rose by about same rate – that is young people opted out of the labour market

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Employment expanded for those with tertiary education (by about 113,000) Employment contracted for those with...
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