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The Effect of Spatial Unemployment on the Neighbouring Regions’ Economies: A Regional Case Study of KwaZulu-Natal in South Africa

Author

Listed:
  • Clive Egbert Coetzee

    (Stellenbosch University, South Africa)

  • Ewert P. J. Kleynhans

    (North-West University, South Africa)

  • Ewert P. J. Kleynhans

    (North-West University, South Africa)

Abstract

This article investigates the degree of spatial dependence of unemployment on neighbouring economies with possible implications for cross-border community development initiatives. The local municipalities within the KwaZulu-Natal province in South Africa are used as a case study. Spatial econometric techniques are employed that incorporate dependence between regions in close geographical proximity. Disaggregated data and knowledge about the dynamics at a sub-regional level are usually unavailable for designing employment policies, especially for regional economies in under-developed countries. The results suggest an absence of spatial unemployment clustering and autocorrelation between neighbouring economies. The absence of externalities implies that little mutual dependence exists between adjacent economies, and therefore municipal unemployment patterns can be viewed as spatially random. The economy of a region is therefore fundamentally heterogeneous in that its unemployment rates are determined and influenced by its unique and diverse factors rather than neighbouring unemployment trends or patterns.

Suggested Citation

  • Clive Egbert Coetzee & Ewert P. J. Kleynhans & Ewert P. J. Kleynhans, 2022. "The Effect of Spatial Unemployment on the Neighbouring Regions’ Economies: A Regional Case Study of KwaZulu-Natal in South Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(4 (Winter), pages 401-431.
    • Handle: RePEc:mgt:youmgt:v:20:y:2022:i:4:p:401-431
    DOI: 10.26493/1854-6935.20.401-431
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    References listed on IDEAS

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    More about this item

    Keywords

    regional unemployment; labour; spatial regression models; spatial dependence; regional impact and influence; neighbours; spatial weights; spatially lagged dependent variables; spatial autocorrelation;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • 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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