n Studies in Economics and Econometrics - Rising unemployment in a growing economy : a business cycle, generational and life cycle perspective of post-transition South Africa's labour market

Volume 38, Issue 1
  • ISSN : 0379-6205


This paper performs age-period-cohort decompositions of post-apartheid South African labour market outcomes in a period where unemployment worryingly rose, despite robust economic growth. We disentangle short-term from long-run factors, concluding that the first post-transition decade led to higher equilibrium unemployment. Claims of jobless growth over the business cycle are invalidated, with unemployment following a counter-cyclical pattern. Rather, generational components highlight long-run wage rigidities, decreases in labour demand within poorly educated groups and a gradual increase in participation amongst the most recent birth cohorts, reflecting higher education levels and changes in household formation. A disproportionate surge in entry amongst the very youngest (who were affected by post-transition education reforms) explains why unemployment rose in spite of an economic upswing in this period, and raises the concern of labour market scarring for this group.

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