The challenge of low employment economic growth in South Africa: 1994 -2008

Mahadea, Darma; Simson, Richard

doi:10.4102/sajems.v13i4.92

Cited by 26 publications

(12 citation statements)

References 22 publications

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“…Since there was a substantial increase in economic growth, the unemployment rate was supposed to decrease. However, the formal sector failed to provide jobs and unemployment increased drastically (Mahadea and Simson 2010). This was witnessed in the construction, agriculture, mining and manufacturing sectors.…”

Section: Stylized Facts About South Africa's Economymentioning

confidence: 99%

Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa

Pasara

Garidzirai

2020

Economies

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Stagnant economic growth, decreasing investment and high unemployment remain consistent macroeconomic challenges for South Africa. Gross Capital formation (GCF) is designed to improve employment and economic growth (GDP). This study investigates the causality effects of the three variables using time series data from 1980 to 2018 in a Vector Autoregressive (VAR) framework. Results of the first model reveal a positive long-term relationship between gross capital formation GCF and economic growth GDP. Contrariwise, the first model indicates that unemployment (UNEMP) does not influence economic growth (GDP) in the short run. The second model results reveal a significant and positive relationship between UNEMP and GCF, while the third model shows an inverse relationship between GDP and UNEMP. Based on these findings, the study therefore recommends that fiscal authorities introduce expansionary fiscal policy that stimulates economic growth, investment and employment.

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Section: Stylized Facts About South Africa's Economymentioning

confidence: 99%

Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa

Pasara

Garidzirai

2020

Economies

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“…Attesting to the country's social and economic imbalances, South Africa has encountered its share of high unemployment rates (World Bank, 2016). This includes low levels of job creation and growth in the current decade, despite the inception of the 1994 social and economic transformations (Mahadea & Simson, 2010). Disparities in the country's growth, including a depreciating and highly volatile exchange rate, have similarly proved deleterious for economic growth and employment (Rusike, 2016).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Exchange Rate Movements and Economic Growth on Job Creation

Chipeta

Meyer

Muzindutsi

2017

Studia Universitatis Babes-Bolyai Oeconomica

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Abstract:Job creation is at the centre of economic development and remains a source of sustenance for social and human relations. The creation of a job-enabling economic environment is imperative in promoting social and economic cohesiveness in the macro and microeconomic environment. Any shocks to the economy, particularly those of exchange rate shocks and changes in economic growth, may negatively affect the labour market and job creation. This study made use of quarterly observations, from the first quarter of 1995 to the fourth quarter of 2015, to investigate the effect of the real exchange rate and economic growth on South Africa's employment status. South Africa, a developing country, was selected as a case study due to its high unemployment rate that is still increasing. The Vector Autoregressive (VAR) model and multivariate co-integration techniques were used in assessing the impact and responsiveness of employment to the real exchange rate and real economic growth in South Africa. Findings of this study revealed that employment responds positively to economic growth and negatively to the real exchange rate in the long-run. The short-run displays a positive relationship between real economic growth and employment, while the relationship between employment and the real exchange rate is also negative. However, the effect of economic growth in creating jobs is not significant enough in stimulating job creation in South Africa, as indicated by results in variance decomposition. Movements in the exchange rate exerted a significant short and long-run negative effect on employment dynamics; implying that a depreciation of the rand against the U.S. dollar is associated with decrease in overall employment. Exchange rate stability is thus important for economic growth and job creation in South Africa. The study provided further recommendations on promoting job creation in South Africa and other developing countries.JEL classification: E65, O11, O55

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“…The idea of the new administration to scour the globe for $100 billion in investment is that very same goal of attracting and increasing FDI into South Africa which was set in the past seems to be far from being realised because the government may not have done enough to promote it [8]. One of the reasons behind all these is that South Africa remains heavily dependent on foreign investment because of the lower domestic savings between 1994 and the first quarter of 1998 [9]. A total net inflow of capital of R57.4 billion, was realised between 1994 and the first quarter of 1998.…”

Section: Introductionmentioning

confidence: 99%

An Analysis of Drivers of International Investment Decisions in South Africa

Mongale¹,

Baloyi²

2020

Perspectives on Economic Development - Public Policy, Culture, and Economic Development

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The study investigated the drivers of international investment decisions in South Africa. As part of its investment drive, the government has embarked on a series of activities to lure investors. That been the case it appears that most of the empirical studies focused mainly on the relationship between investment and economic growth, hence very little seems to be known about the empirical evidence of other drivers of international investment decisions and their impact on the South African economy. The findings are envisaged to provide information and to add policy formulation to attract the much needed foreign investment. The autoregressive distribution lag approach was chosen to analyse the long and the short run relationships amongst the variables of interest and Granger Causality analysis was also employed to determine causal relationships between dependent variable and its regressors. The results indicated that a stronger statistical and economic basis for empirical error correction model was established by the presence of cointegration amongst the variables and all the regressors were found to have a positive effect in the stock of foreign direct investment. Empirical findings suggest that government should ensure stable macroeconomic policies and labour disputes that result into prolonged strike actions must be minimised.

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The challenge of low employment economic growth in South Africa: 1994 -2008

Cited by 26 publications

References 22 publications

Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa

Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa

The Effect of Exchange Rate Movements and Economic Growth on Job Creation

An Analysis of Drivers of International Investment Decisions in South Africa

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