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Unemployment and economic growth in South Africa: a re-examination

Author

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  • Zodwa Xesibe
  • Sheilla Nyasha

Abstract

In this study, we have empirically examined the impact of unemployment on economic growth in South Africa, using time series data from 1994Q1 to 2017Q4. The study made use of the error correction model in determining the relationship between unemployment and economic growth. In addition to economic growth and unemployment, four control variables were added to the model. These were government expenditure, inflation, investment and household final consumption expenditure. Using the error correction model (ECM), the results of the study reveal that there is a negative relationship between unemployment and economic growth in South Africa. An increase in unemployment in South Africa would reduce the rate of economic growth. Based on the research findings, where unemployment was found to have a negative impact on economic growth in the study country, the South African authorities responsible for economic policy are recommended to formulate and enhance policies that aim at reducing unemployment in the country.

Suggested Citation

  • Zodwa Xesibe & Sheilla Nyasha, 2020. "Unemployment and economic growth in South Africa: a re-examination," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 12(2), pages 101-116.
    • Handle: RePEc:ids:ijsuse:v:12:y:2020:i:2:p:101-116
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    Citations

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    Cited by:

    1. Sheilla Nyasha & Nicholas M. Odhiambo & Mercy T. Musakwa, 2021. "The Impact of Stock Market Development on Unemployment: Empirical Evidence from South Africa," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 71(1-2), pages 92-110, January-J.
    2. S. Nyasha & M.T. Musakwa & N.M. Odhiambo, 2021. "The Impact Of Stock Market Development On Unemployment: Empirical Evidence From South Africa," Working Papers AESRI-2021-22, African Economic and Social Research Institute (AESRI), revised Jul 2021.
    3. Sheilla Nyasha & Nicholas M. Odhiambo & Mercy T. Musakwa, 2021. "The Impact of Stock Market Development on Unemployment: Empirical Evidence from South Africa," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 71(1-2), pages 92-110, January-J.
    4. Hala Hjazeen & Mehdi Seraj & Huseyin Ozdeser, 2021. "The nexus between the economic growth and unemployment in Jordan," Future Business Journal, Springer, vol. 7(1), pages 1-8, December.

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