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South African Journal of Economic and Management Sciences

On-line version ISSN 1015-8812

Abstract

MAHADEA, Darma  and  SIMSON, Richard. The challenge of low employment economic growth in South Africa: 1994 - 2008. S. Afr. j. econ. manag. sci. [online]. 2010, vol.13, n.4, pp. 391-406. ISSN 1015-8812.

Although the economy has registered positive economic growth over the past 15 years since the demise of apartheid, the formal sector in South Africa has been unable to provide adequate employment for labour. Against a background of the recent almost global recessionary climate, this lack of employment is a serious problem. While government has responded with many initiatives to deal with employment creation, unemployment rates in South Africa remain high. In this paper the problem of low employment economic growth performance is initially examined for the period 1994 -2008 by drawing on the Harrod-Domar model and then over a longer time period by using regression analysis. The paper uses a parsimonious regression model to highlight the probable links between changes in economic growth and changes in employment. The growth elasticity of employment over the 1994-2008 period is low and over a longer time horizon the marginal growth employment effect is weak.

Keywords : Growth; employment; jobless growth; entrepreneurship.

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