WP 02/065 - Why is Youth Unemployment so High and Unequally spread in South Africa?

Cecil Mlatsheni and Sandrine Rospabe

Date of Publication: 
May 2002

Not only does the South African labour market exhibit a high unemployment rate for the young, according to international standards, but it also shows evidence of large inequalities between age groups, races and genders. Thus, this paper first seeks to explain these stylised factsinvestigating the microeconomic determinants of employment for different groups of the population. An application of the residual difference method of decomposing group wage differences (Oaxaca, 1973) to discrete choice models enables us to investigate whether the age, racial and gender employment gaps reflect heterogeneous "productive" characteristics between the two groups (such as education, experience, family background, location etc.) or, alternatively, result from differences in the way these characteristics are rewarded on the market.

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