Surviving unemployment without state support: Unemployment and household formation in South Africa

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Show simple item record Klasen, Stephen Woolard, Ingrid 2013-10-11T12:36:55Z 2013-10-11T12:36:55Z 2005-10
dc.identifier.isbn 0-77011-063-1
dc.description.abstract While in many African countries, open unemployment is largely confined to urban areas and thus overall rates are quite low, in South Africa (and a few other Southern African countries), open unemployment rates hover around 30%, with rural unemployment rates being even higher than that. This occurs despite the near complete absence of an unemployment insurance system and little labour market regulation that applies to rural labour markets. This paper examines how unemployment can persist without support from unemployment compensation. Analysing household surveys from 1993, 1995, and 1998, we find that the household formation response of the unemployed is the critical way in which the unemployed assure access to resources. In particular, unemployment delays the setting up of an individual household by young persons, in some cases by decades. It also leads to the dissolution of existing households and a return of constituent members to parents and other relatives and friends. Access to state transfers (in particular, noncontributory old age pensions) increases the likelihood of attracting unemployed persons to a household. Some unemployed do not benefit from this safety net, and the presence of unemployed members pulls many households supporting them into poverty. We also show that the household formation response draw some of the unemployed away from employment opportunities, and thus lowers their employment prospects. en_US
dc.language.iso en en_US
dc.publisher CSSR and SALDRU en_US
dc.relation.ispartofseries CSSR/SALDRU Working Papers;129
dc.subject Unemployment en_US
dc.subject South Africa en_US
dc.subject Rural unemployment en_US
dc.subject Urban unemployment en_US
dc.subject Unemployment insurance en_US
dc.subject Labour market regulation en_US
dc.subject Household formation en_US
dc.subject State transfers en_US
dc.subject Pension en_US
dc.subject Social grants en_US
dc.subject Poverty en_US
dc.subject Employment opportunities en_US
dc.subject Employment en_US
dc.title Surviving unemployment without state support: Unemployment and household formation in South Africa en_US
dc.type Working Paper en_US

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