LMIP Report 1
Authors: Haroon Bhorat, Sumayya Goga and Benjamin Stanwix, University of Cape Town
This paper examines broad labour market trends in SA with a focus on the nature of employment growth and the resulting impact on wages. Unemployment has been a constant feature of South Africa’s economy. The mismatch between high-skilled demand and low-skilled workers has been exacerbated by deepening capital intensity and the historical shift away from the primary sector towards secondary and tertiary sectors. The result is an intensification of skills-biased labour demand trajectory. The paper analyses these skills-biased labour demand changes through an examination of sectoral and occupational employment growth trends. Using Katz and Murphy’s decomposition technique, the paper interrogates whether between-sector or within-sector forces play a greater role in the labour demand for workers in different occupations. The analysis then highlights the changing returns to occupation tasks by identifying five ‘task categories to explore the way in that different tasks are like to be affected by internal (e.g. technological change) or external (international trade or competition) factors.
