These institutions-known in South Africa as further education and training colleges (FET)-have been unable to ramp up capacity and provide the types of training required by the economy. This group of early school-leavers, dropouts and unemployed high school diploma-holders requires interventions tailored to their particular needs and characteristics if they are to be fully able to participate in the economy.Ī number of skills and training programs have been set up through various publicly funded technical and vocational education and training (TVET) institutions with the aim of facilitating entry into the labor market. However, there are large cohorts of young people that have already been impacted by weaknesses in the education system. In the National Treasury’s budget for the 2013/14 fiscal year, education spending increased to 232.5 billion rand (R) ($21.8 billion), targeting infrastructure, services and the backlog in numeracy and literacy skills. For this reason, a number of funding and policy interventions are aimed at improving the education system such that it would raise youth employment prospects. In short, school-leavers do not exit the system with the requisite skills demanded by the labor market. Supply-Side Policies Targeting Unemployed YouthĬhallenges within the South African education system are key structural issues underlying youth unemployment. From the demand side, an employment subsidy has been recently proposed by the National Treasury to incentivize employers to hire young people. These include targeting the formal education system, post-school training, public employment and deployment programs, entrepreneurship interventions and an attempt at job placement programs. To date, policies that have been implemented have largely been supply-side initiatives aimed at the structural causes of youth unemployment. Persistently high unemployment suggests a lack of effective policy interventions. These socio-economic factors have resulted in a gap between productivity and entry-level wages for young workers, which is a constraint on job creation.
Of those who do have resources available as a result of their family support or network, they often have unrealistically high reservation wages, thereby resulting in relatively long periods of unsuccessful searching (Mlatsheni, 2007 Von Fintel and Black, 2007 Rankin and Roberts, 2011 Roberts, 2011). These young people lack strong networks or social capital that allow them to source job opportunities, and tend not to have sufficient financial resources to enable mobility to areas where there is demand for labor. They also have little work experience, which is a particularly undesirable characteristic for employers. They often have low levels of education, have dropped out of school and invariably do not have the literacy, numeracy and communication skills needed in the labor market. Unemployed youth are characterized by their lack of employability resulting from a range of socio-economic factors. Roughly 30 percent of male youth and 36 percent of female youth are NEETs, disconnected from both the labor market and opportunities that promote future employability. (By international comparison, while the ratio of youth to adult unemployment is fairly similar for other countries that are economically comparable to South Africa, the overall unemployment rate is far higher than in other emerging markets.) Of the 10.2 million individuals aged between 15 to 24 years, one-third are not in employment, education or training (and are often referred to as “NEETs”). Youth unemployment is high, even in comparison with South Africa’s very high average unemployment rate of 34 percent. In 2013, the youth unemployment rate was 63 percent of the youth labor force (3.2 million individuals) according to the expanded definition of unemployment, which includes as unemployed those who are not actively looking for a job (i.e., the non-searching unemployed, or “discouraged work-seekers”). Cross-country comparisons regularly affirm that South Africa’s unemployment rates are among the highest in the world. Youth unemployment has been inordinately high for many years in South Africa and is one of the country’s major socio-economic challenges.
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