Unemployment: The role of the public sector in increasing the labour absorption capacity of the South African economy

Abstract

The critical proportions of unemployment and the mainly structural nature of the problem necessitate a re‐evaluation of policy measures in order to foster a pro‐poor growth and development process in South Africa. The propblem could be addressed by implementing an integrated and comprehensive policy package. The public sector expenditure programme is a potent policy measure for stimulating employment growth in the economy. It is argued that a restructuring rather than an expansion of the public sector expenditure programme can result in short‐term, enduring employment effects. The restructured public sector expenditure programme should include characteristics of special employment programmes, focusing on the procurement and provision of more labour‐intensive goods and services and a reorientation of expenditure programmes in favour of the unemployed and the poor.

Notes

Centre for Policy Analysis, Development Bank of Southern Africa. The contributions of C J Meintjes, Centre for Information Analysis, in providing and analysing the data, are gratefully acknowledged.