NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Why Has Unemployment Risen in the New South Africa

Abhijit Banerjee, Sebastian Galiani, Jim Levinsohn, Zoë McLaren, Ingrid Woolard

NBER Working Paper No. 13167
Issued in June 2007
NBER Program(s):   ITI   LS

We document the rise in unemployment in South Africa since the transition in 1994. We describe the likely causes of this increase and analyze whether the increase in unemployment is due to structural changes in the economy (resulting in a new equilibrium unemployment rate) or to negative shocks (that temporarily have increased unemployment). We conclude the former are more important. Our analysis includes a multinomial logit approach to understanding transitions in individual-level changes in labor market status using the first nationally representative panel in South Africa. Our analysis highlights several key constraints to addressing unemployment in South Africa.

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Document Object Identifier (DOI): 10.3386/w13167

Published: Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October. citation courtesy of

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