The Financial Crisis And Its Enduring Legacy For Youth Unemployment
By Neil Rankin, Gareth Roberts, Volker Schöer and Debra Shepherd
Young people are generally on the fringes of the labour market. They lack work experience and networks that can help them get jobs. If employed, their employment status is often tenuous – they are on temporary contracts, are frequently the first to be retrenched in times of economic hardship, and are in the types of firms or sectors most sensitive to fluctuations in the economy. For these and other reasons, they are dispro-portionally affected when the economy slows down.
Between 2002 and 2007, South Africa’s GDP growth steadily increased and unemployment rates dropped. As Figure 2.1.1 shows, unemployment fell dramatically during this period, particularly for those aged between 15 and 24 years – from 61.5 to 50.5 per cent for young females and from 53.5 to 41.4 per cent for young males. However, this trend was interrupted by the global financial crisis that began in the second half of 2008. Since then, unemployment rates have risen, especially for young people. By 2010, the unemployment rate for young females had increased by four percentage points, and for young males by over six percentage points, compared to less than two percentage points for those aged between 35 and 65 years.
The response of the labour market to the global financial crisis illustrates the volatility of employment for young people. In order to better design policies to deal with this volatility and to reduce the high unemployment rates young people face, it is useful to know more about the dynamics of employment among this age group.
This paper considers a number of questions: What types of jobs for young people have been particularly affected? How has demand for young people changed during this period? What processes have driven the increases in unemployment observed among young people? And, are the current policy measures sufficient to deal with the challenges of youth unemployment, particularly when economic growth is sluggish.
(Download Short Paper in PDF)
(Download Short Paper in Word)