The Sectoral Employment Intensity of Growth in South Africa

Abstract

Concerns have been expressed recently about the inability of the South African economy to provide adequate employment for the increasing number of job seekers. This paper investigates how sectoral employment intensity of output growth in the eight non-agricultural sectors of the South African economy has evolved in the period from the first quarter of 2000 to the fourth quarter of 2012, with a view to identifying key growth sectors that are employment intensive. Empirical findings of the study suggest that total non-agricultural employment and GDP do not move together in the long run, implying that jobless growth occurred in South Africa during the period under review. This supports the view that South Africa has become less labour-intensive and more capital-intensive. Results of a sectoral composition confirm a long-run relationship between employment and growth in the finance and business services, manufacturing, transport and utilities sectors. In particular, the results suggest that sectors within the tertiary sector are the best performing sectors in terms of employment intensity of output growth, reflecting the changing structure of the economy and the nature of employment shifting away from primary towards the tertiary sector. Investment in the tertiary sector is necessary to foster new employment opportunities and can assist in improving overall employment intensity in South Africa.

Job Absorption Capacity of Nigeria’s Mining and Quarrying Sector

“…Similar data were collected for the other sectors. Estimation methodology of elasticity of employment, in deference to Ajilore and Yinusa (2011); Mkhize (2015); and, Adeniyi (2019) was used to analyse the data. Specifically, we used the Vector Error Correction Model (VECM).…”

“…The national output of an economy, and by extension, any sector of the economy, is produced by combining labour input (demand for labor) with other factors of production in that economy or sector. The demand function for labor can be derived by assuming a constant elasticity of substitution (CES) production function and solving the marginal product of labor (MPL) equation for the labor input variable (Mkhize, 2015, andAdeniyi, 2019) as follows: -…”

“…That is, the series' mean, variance and covariance with lagged values of itself should not change with time (Hansen & King, 1996;Mkhize, 2015;Adeniyi, 2019). According to Mkhize, (2015) ADF test tends to over-reject the null hypothesis when using too few lags and to reduce the degrees of freedom when there are too many lags. Song and Witt (2000) in their study of tourism demand modelling and forecasting, justified the importance of appropriate lag length for time series data.…”

“…Consequently, long term interest rates would be a positive correlate of employment. (Malunda, 2012;Nangale, 2012;Baah-Boateng, 2013;Mkhize, 2015;and, Adeniyi, 2021).…”

Designing a Framework for Employment-Growth Targeting in Nigeria

“…The national output of an economy is produced by combining the factors of production, including labour. The demand function for labour can be derived by assuming a constant elasticity of substitution (CES) production functional form and estimating the marginal productivity of labour (MPL) equation to obtain the input of labour in a Cobb-Douglass production functional form as follows (Mkhize, 2015):…”