Hit the Road: Spatial Characteristics of Labor Absorption in South Africa

Abstract

Unequal spatial concentration is at the heart of economic imbalance in South Africa. This research aimed at spatially characterizing labor absorption patterns and exploring the link to spatial development. Labor absorption is often used as an indicator of labor market well-being and for many countries, the indicator is often more insightful than the unemployment rate. The research used secondary data to create a longitudinal data set of labor absorption, functional literacy, the ratio of urban population and gross domestic product growth rate, among others, at a municipal level. Exploratory spatial data analysis and thematic mapping were undertaken to illustrate the characteristics of the labor market, while spatial grouping created clusters of municipalities based on labor absorption. A positive upward trend was observed between labor absorption and the share of people in an urban area; that is, the more urban an area, the higher the labor absorption rate. Furthermore, the spatial clustering of municipalities highlighted linear patterns and when this was overlayed with roads and development corridors, clearly indicated the impact of regional spillovers. The findings suggest a more integrated focus on regional innovation policy to reduce spatial disparities in the economic landscape.