Strategies for reducing youth unemployment in South Africa

Abstract

Youth unemployment is one of the major challenges that the majority of countries worldwide are faced with currently. In South Africa, youth unemployment has been escalating, despite the introduction of initiatives by the government to reduce unemployment. This study aims to identify the root causes of youth unemployment in South Africa and suggesting solutions to reduce youth unemployment. The researcher utilized secondary data obtained from the Quarterly Labour Force Survey by Statistics South Africa, time-series data from the South African Reserve Bank and the Department of Higher Education and Training websites for conducting data analysis. The type of research methodology utilized by the researcher is a Quantitative research method. The findings of the study indicate that the root causes of youth unemployment include the poor education system resulting in a skills-mismatch, a shift of the economy from being driven by primary sectors which are labour intensive towards Tertiary sectors which are skills intensive, geographic migration and trade unions bargaining for wage increases. An econometric regression model was conducted by the researcher in Eviews 8 a statistical data analysis software using time series data from the South African Reserve Bank, with youth unemployment being the dependent variable. The results of the econometric regression model indicated that the variables inflation rate, Gross value added as a proxy for Gross Domestic Product and the Total loan debt of the nation were statistically significant at a 5% level of significance. This means that youth unemployment is influenced by the inflation rate, Gross Domestic Product and the Total loan debt of the nation or government debt. Whenever there is an increase in the government debt that deprives the youth because there is no funding available for the government to invest in youth empowerment programmes. The researcher concludes by giving policy recommendations on possible solutions to youth unemployment.