WP 05/098 - Market Failure, Human Capital, and Job Search Dynamics in South Africa: The Case of Duncan Village

Patrick Duff and David Fryer

Date of Publication: 
September 2005

This paper argues that the economic literature on unemployment and poverty in South Africa has under-explored potentially important feedback mechanisms which, because they serve to change the structure of labour markets and affect human capital trajectories, serve to endogenise labour market exclusion. Using a tailor-made database from Duncan Village, East London, this paper probes such processes, focussing around the question of job search. The evidence presented suggests that endogenous factors generating labour market exclusion are important in locking-in exclusion, and suggests that macro-micro linkages need to be further considered.

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