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Is There Hysteresis in South African Unemployment? Evidence from the Post-Recessionary Period

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  • Vuyokazi Pikoko

    (Nelson Mandela University)

  • Andrew Phiri

    (Nelson Mandela University)

Abstract

High unemployment in South Africa possess as the country’s most problematic economic issue faced by South African policymakers and hence is considered an overriding priority within the design of large scale government expenditure programmes. In this study, we investigate the hysteresis hypothesis for 8 categories of unemployment in South Africa using a battery of individual and panel unit root testing procedures applied to quarterly data collected in the post-recession period of 2008:q1 to 2017:q2. Indeed our empirical results confirm the hysteresis hypothesis for a majority of unemployment classifications with the exception of unemployment associated with persons aged 55 to 64 years old. Overall, our obtained empirical results hold far-reaching ramifications towards domestic policymakers in the sense of encouraging government to implement more labour focused policies in their fight against unemployment.

Suggested Citation

  • Vuyokazi Pikoko & Andrew Phiri, 2019. "Is There Hysteresis in South African Unemployment? Evidence from the Post-Recessionary Period," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 15(3), pages 365-387, JUNE.
    • Handle: RePEc:dug:actaec:y:2019:i:3:p:365-387
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    More about this item

    Keywords

    Unemployment; Hysteresis; Unit root tests; South Africa; Sub-Sahara Africa (SSA);
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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