The extent of churn in the South African youth labour market: Evidence from NIDS 2008-2015

Abstract

The transition from schooling to work for many South African youth (aged 15-34 years) is neither a smooth nor immediately successful one. This is apparent in the persistently high youth unemployment rate that has been an enduring feature of the labour market. However, what the unemployment rate does not reveal is the degree to which it is the same youth who remain persistently unemployed, rather than moving between labour market states. In other words the unemployment statistic does not give any indication of the degree of churn in the South African youth labour market. This paper explores the nature and extent of this churn by investigating patterns of persistence of employment, persistence of unemployment, and movement between these states. To investigate these labour mobility issues, the first four waves of the National Income Dynamics Study (NIDS) are analysed. The data for the first wave of NIDS was collected in 2008, the second in 2010-2011, the third in 2012, and the fourth in 2014-2015. A balanced panel of Wave 1 youth is used to look at transitions in labour market states from Wave 1 to Wave 4.