Labour Market Dynamics in South Africa at the Onset of the COVID‐19 Pandemic

Abstract

This paper conducts an analysis of labour market dynamics in South Africa during the initial period of lockdown, from the end of March to the end of April 2020, using the first wave of the NIDS‐CRAM (2020) survey. Within our sample of over 6,000 adults aged 18 to 59, we found that there was a very large decrease in employment. The fraction of the sample that was conventionally classified as employed decreased from 57% in February to 48% in April. If we further exclude temporarily absent workers, which we term “furloughed” employees, this fraction decreases further to 38%. Thus, about one out of every three employed people in our sample either lost their job or did not work and received no wages during April. This has extremely large implications for poverty and welfare. We further analyse the labour market by comparing across demographic groups as defined by race, by gender, by age groups, by geographic areas and by education levels. The over‐arching finding from this analysis is that the job losses were not uniformly distributed amongst the different groups. In particular, groups who have always been more vulnerable – such as women, African/Blacks, youth and less educated groups – have been disproportionately negatively affected.

How COVID-19 Pandemic Worsens the Economic Situation of Women in South Africa

“…Furthermore, as was already mentioned, our model does not take into account any fiscal stimulus or social transfer plan setup by the government which is an important subject of further research [see for instance Habiyaremye et al ( 2021 ), Bhorat et al ( 2021 ), or Chitiga et al ( 2021 )]. Nevertheless, our results, simulated with a gendered CGE, are consistent with the impacts which have been empirically observed for labour markets, labour and poverty for South Africa (Ranchhod and Daniels ( 2021 )) or other developing countries (see for instance Cuesta and Pico ( 2020 ); Escalante and Maisonnave ( 2021 )). These model results offer consistent quantitative information on intersectoral dimensions of the COVID-19 crises on the economic situation of women.…”

“…Women suffer disproportionately more negative impacts of the pandemic compared to men even though the differences are small. Our results that women have been affected relatively more than men go in the same direction as Casale and Posel ( 2020 ) and Ranchhod and Daniels ( 2021 ). The negative effect on women in our analysis is because the sectors that are female labour intensive see more negative effects as a result of both the direct and indirect effects caused by the pandemic.…”

Evaluation of the impacts of the COVID-19 pandemic on the development of the unemployment rate in Slovakia: counterfactual before-after comparison

“…Pandemic has a strong impact on unemployment also in less developed countries. For example, the studies Ababulgu Abasimel and Wana Fufa (2021); Ranchhod and Daniels (2021) analyse the impact of the pandemic on unemployment in countries on the African continent and found a rapid increase in unemployment rates.…”

Effects of COVID-19 on the economy and mental health of young people in South Africa: opportunities for strengthening social protection programmes by integrating mental health

“…While higher income professionals and managers have been able to maintain physical distancing, areas of high transmission have emerged in dense zones with workplace clusters, affecting mainly manual workers in mining, manufacturing, retail and services (Erero & Makananisa, 2021). Survey data suggest that traditionally more vulnerable groups, such as women, black Africans, youth, and less educated groups, have been disproportionately negatively affected (Ranchhod & Daniels, 2020). For young people in particular, the lockdown during the second quarter of 2020 left approximately 13 million students without adequate education in a country where already 80% of students experience learning poverty (defined by the World Bank as being unable to read and understand a simple text by age 10), and the high unemployment rate among this segment of the population has been further aggravated by the decline in economic activity (Zeufack et al, 2020).…”

“…In an initial survey of almost 6,100 adults aged 18 to 59 conducted in March-April 2020, results showed a decrease of employed individuals in the sample from 57% in February to 48% in April (Ranchhod & Daniels, 2020). For young people aged 18 to 29, data from the same survey shows a decrease in employment rates from 42% to 35% between February and April, impacting a country which already registered 29.1% unemployment before the pandemic, with almost twice the rate in the case of young people (World Bank, 2020).…”