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South African unemployment in the post-financial crisis era: What are the determinants?

Mbekeni, Lutho and Phiri, Andrew (2019): South African unemployment in the post-financial crisis era: What are the determinants?

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Abstract

High unemployment rates is one of the greatest economic challenges facing post-apartheid South African government over the past two decades and this problem has become more worrisome in the post-global financial crisis period. Our study examines the determinants of unemployment for the South African economy in the post-crisis period over a quarterly frequency period of 2009:Q1 to 2018:Q4. The determinants are examined for 4 classes of unemployment rates (total, male, female and youth) and we further partition possible unemployment determinants into fiscal, monetary and macroeconomic variables. The estimation results from the employed autoregressive distributive lag (ARDL) models find income tax, repo rates, economic growth, trade, investment, household debt and savings to be significant determinants of unemployment in the post-crisis South African economy and yet we note discrepancies of the significance of these determinants amongst different unemployment categories. Relevant policy implications are matched against our obtained empirical findings.

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