OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Realising South Africa's Employment Potential

Unemployment in South Africa is extremely high and unevenly distributed, being concentrated among young less-skilled blacks. The legacies of apartheid can explain part of the increase in labour supply and inability of the economy to absorb it which produced the extreme levels of unemployment, but more could have been done to unwind those legacies and other policies and institutions have contributed to the dysfunction of the labour market. Notably, improvements in product market regulation to strengthen competition could help expand formal sector employment. Changes in municipal laws and regulations to ease migration and facilitate informal employment are also likely to be particularly important. Improving the implementation of employment protection legislation could also help reduce unemployment. Efforts to tackle crime could help reduce the brain drain and attract skilled immigrants, which would likely boost demand for less-skilled workers via complementarities. Over the longer term, improvements in basic education will be key to reducing the excess supply of less-skilled workers.


Keywords: employment protection, South Africa, union wage differentials, education, labour force participation rates, training, employment, unemployment, working age population
JEL: J5: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining; J11: Labor and Demographic Economics / Demographic Economics / Demographic Trends, Macroeconomic Effects, and Forecasts; J7: Labor and Demographic Economics / Labor Discrimination; J3: Labor and Demographic Economics / Wages, Compensation, and Labor Costs
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error