Is the increasing rate of unemployment a worst nightmare facing South Africa?

Abstract

Unemployment remains one of the major economic and social challenges facing both developed and developing countries. To date, it still remain a policy concern particularly in developing countries where lot of people go through long spells of joblessness, considerable loss of individual income and severe cut in standard of living. In South Africa, Unemployment has been unquestionably high particularly among the youth. This follows the publicized Stats SA quarterly labour survey of 2019 that revealed a 1.8 percentage points increase from 27.2% in the second quarter of 2018 to 29 per cent in the second quarter of 2019. Therefore, the primary motivation of this current study was to analyse the effects of increasing unemployment is South Africa with the aim of recommending possible solutions to the problem. The study employed annual time series data spanning the period 1989 to 2019. The results of the study revealed that GDP per capita, gross national income growth and literacy levels are negatively related with unemployment. This implied that increase in these variables would assist with unemployment reduction in South Africa.