Social protection and labour market 
outcomes of youth in South Africa 
Ingrid Woolard 
SALDRU, University of Cape Town
Youth and adult employment ratios in South Africa 
and selected emerging market economies 
Source: ILO, 2010.
How do the unemployed support 
themselves? 
Type of support Unemployed youth Unemployed adults 
Someone in the HH has 
59%...
Social security in South Africa 
Social insurance – Unemployment Insurance – is paid to 
about 5% of the unemployed. It is...
Labor supply responses to the 
South African old-age pension 
– Work less? 
– Work more? 
– Work elsewhere?
Mixed evidence 
• Bertrand et al (2003) found evidence for a classic 
disincentive effect associated with pension receipt ...
Focus on youth – 
Ardington, C.; Barnighausen, T.; Case, A.; 
Menendez, A. (2013) 
• Might anticipate different effects on...
Gain versus loss of the pension 
• Pension gain and pension loss may have asymmetric 
effects on migration and that the ef...
Pension Gain 
For potential migrants, gain of the pension increases 
the probability that the household meets the 
financi...
Pension Loss 
• For potential migrants, loss of the pension reduces 
the probability that the financial constraint is met ...
Findings 
• Relaxation of financial constraints can aid young men 
in their search for jobs 
• No perverse effects of the ...
Need for unemployment benefits for 
youth that have never worked? 
• Some evidence that existing grants increase 
job sear...
Thank you
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Ingrid Woolard: Social protection and labour market outcomes of youth in south africa

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This presentation is part of the programme of the International Seminar "Social Protection, Entrepreneurship and Labour Market Activation: Evidence for Better Policies", organized by the International Policy Centre for Inclusive Growth (IPC-IG/UNDP) together with Canada’s International Development Research Centre (IDRC) and the Colombian Think Tank Fedesarrollo held on September 10-11 at the Ipea Auditorium in Brasilia.



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Ingrid Woolard: Social protection and labour market outcomes of youth in south africa

  1. 1. Social protection and labour market outcomes of youth in South Africa Ingrid Woolard SALDRU, University of Cape Town
  2. 2. Youth and adult employment ratios in South Africa and selected emerging market economies Source: ILO, 2010.
  3. 3. How do the unemployed support themselves? Type of support Unemployed youth Unemployed adults Someone in the HH has 59% 47% a job Person receives a grant 14% 17% Someone in the HH receives a grant 45% 42% Home agric production (self) 5% 6% Someone in the HH is doing home agric production 8% 8% Quarterly Labour Force Survey, 2012:Q3
  4. 4. Social security in South Africa Social insurance – Unemployment Insurance – is paid to about 5% of the unemployed. It is a contributory scheme and accounts for 0.2% of GDP Social assistance – cash transfers – go to 16 million individuals (about one-third of the population) each month and accounts for 3.5% of GDP Targeted at vulnerable groups: the major grant types are the State Old Age Pension, the Disability Grant, the Child Support Grant and the Foster Care Grant.
  5. 5. Labor supply responses to the South African old-age pension – Work less? – Work more? – Work elsewhere?
  6. 6. Mixed evidence • Bertrand et al (2003) found evidence for a classic disincentive effect associated with pension receipt • Posel et al (2006)– highlight the importance of looking at migrant labour • Pension has impact on household composition (Klasen and Woolard 2009, Edmonds et al 2005, Ardington et al 2009) • Ranchhod
  7. 7. Focus on youth – Ardington, C.; Barnighausen, T.; Case, A.; Menendez, A. (2013) • Might anticipate different effects on younger and older members for a number of reasons – Younger adults may respond to the arrival of the pension by investing more in their education – Pensioners may prefer supporting their children – Older prime-aged adults’ labour supply may be less responsive to changes in household income – Youth have higher levels of education
  8. 8. Gain versus loss of the pension • Pension gain and pension loss may have asymmetric effects on migration and that the effects may depend on whether an individual is already a labour migrant or not.
  9. 9. Pension Gain For potential migrants, gain of the pension increases the probability that the household meets the financial constraint For current migrants, gain of the pension is largely irrelevant: they must have been meeting the constraint prior to pension gain, and the pension simply reinforces this
  10. 10. Pension Loss • For potential migrants, loss of the pension reduces the probability that the financial constraint is met • For current migrants, loss may have a larger effect on the probability of meeting the financial constraint for individuals in lower status occupations and those who have been migrants for shorter periods, who may find it more difficult to be self-sustaining
  11. 11. Findings • Relaxation of financial constraints can aid young men in their search for jobs • No perverse effects of the arrival of this stable source of income into the rural household leading young adults to choose to be ‘idle’ – neither studying nor working. • Benefit of additional household income appears to help primarily those who have completed high school
  12. 12. Need for unemployment benefits for youth that have never worked? • Some evidence that existing grants increase job search • Effect might be larger if unemployment benefits went directly to the unemployed person and were tied to sanctions, job placement programmes and/or training schemes
  13. 13. Thank you

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