Revisiting transitory and chronic unemployment in South Africa

ABSTRACT

This study comprehensively explores the nature and extent of transitory and chronic unemployment using the data from the first four waves of the National Income Dynamics Study (NIDS) conducted in 2008–15. The empirical findings revealed that the transitorily and chronically unemployed individuals shared highly similar characteristics: African female individuals with incomplete secondary education, residing in urban areas of the Eastern Cape, KwaZulu-Natal and Gauteng provinces. Both groups of unemployed individuals were more likely to come from the youth cohorts (25–34 and 35–44 years, in particular the former cohort), with their households being composed of about five members on average. Lastly, upon examining all employed individuals at the time of wave 4 of NIDS, those who worked across all four waves earned nearly three times as much as those who experienced unemployment of some duration in the first three waves (R11 300 versus R3800 per month, in 2019 December prices).

KEYWORDS:

• Chronic unemployment
• transitory unemployment
• labour market
• National Income Dynamics Study

JEL CLASSIFICATION:

• J00
• J64

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Structural unemployment takes place not only because of the skills mismatch, but also because of geographical mismatch between the respective locations of job seekers and job vacancies, as well as an inflexible labour market (e.g. wage rigidities) (McConnell et al., 2017:552; Yu & Roos, 2018:201).

2 They include the Reconstruction and Development Programme (RDP), Growth, Employment and Redistribution (GEAR), Accelerated and Shared Growth Initiative for South Africa (AsgiSA), New Growth Path (NGP) and National Development Plan (NDP).

3 When examining studies analysing these cross-sectional survey datasets, note that they are not entirely comparable, due to differences in sampling methodology, questionnaire design, and algorithms adopted to distinguish the labour force, employed and unemployed under both the narrow and broad definitions. Refer to Yu (2007, 2009) for more information.