IDEAS home Printed from https://ideas.repec.org/p/ctw/wpaper/202403.html
   My bibliography  Save this paper

Supply-Side Economics of a Good Type: Supporting and Expanding South Africa’s Informal Economy

Author

Listed:
  • Zaakhir Asmal
  • Haroon Bhorat
  • Alexia Lochmann
  • Lisa Martin
  • Kishan Shah

    (Development Policy Research Unit, University of Cape Town)

Abstract

This report presents an empirical profile of South Africa’s informal sector, with an aim of understanding in empirical detail, why South Africa’s informal sector employment remains relatively low in comparison to other developing countries. We present an overview of exogenous constraints to informal activity in South Africa, accompanied by feedback from relevant national and local policy officials where appropriate. We received limited feedback from city officials – itself an indicator of how the informal sector is currently viewed within the country. We consider the limited feedback received within the context of existing data and findings in the literature concerning the informal sector of South Africa. We then provide a preliminary discussion on possible supply-side policy options for expanding the informal sector in South Africa and challenges that may be faced in this regard.

Suggested Citation

  • Zaakhir Asmal & Haroon Bhorat & Alexia Lochmann & Lisa Martin & Kishan Shah, 2024. "Supply-Side Economics of a Good Type: Supporting and Expanding South Africa’s Informal Economy," Working Papers 202403, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:202403
    as

    Download full text from publisher

    File URL: https://commerce.uct.ac.za/sites/default/files/media/documents/commerce_uct_ac_za/1093/dpru-wp202403_0.pdf
    File Function: First version, 2024
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    2. repec:cep:stieop:43 is not listed on IDEAS
    3. Rafael La Porta & Andrei Shleifer, 2014. "Informality and Development," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 109-126, Summer.
    4. Grabrucker, Katharina & Grimm, Michael, 2018. "Does crime deter South Africans from self-employment?," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 413-435.
    5. Jeremy R. Magruder, 2012. "High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 138-166, July.
    6. Bandiera, Oriana & Burgess, Robin & Das, Narayan & Gulesci, Selim & Rasul, Imran & Sulaiman, Munshi, 2013. "Can Basic Entrepreneurship Transform the Economic Lives of the Poor?," IZA Discussion Papers 7386, Institute of Labor Economics (IZA).
    7. Alexia Lochmann, 2022. "Diagnosing Drivers of Spatial Exclusion: Places, People, and Policies in South Africa’s Former Homelands," Growth Lab Working Papers 199, Harvard's Growth Lab.
    8. Poschke, Markus, 2025. "Wage employment, unemployment and self-employment across countries," Journal of Monetary Economics, Elsevier, vol. 149(C).
    9. Alexia Lochmann, 2022. "Diagnosing Drivers of Spatial Exclusion: Places, People, and Policies in South Africa’s Former Homelands," CID Working Papers 140a, Center for International Development at Harvard University.
    10. Haroon Bhorat & Zaakhir Asmal & Kezia Lilenstein & Kirsten van der Zee, 2018. "SMMES in South Africa: Understanding the Constraints on Growth and Performance," Working Papers 201802, University of Cape Town, Development Policy Research Unit.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haroon Bhorat & Timothy Köhler, 2024. "The Labour Market Effects of Cash Transfers to the Unemployed: Evidence from South Africa," Working Papers 202405, University of Cape Town, Development Policy Research Unit.
    2. Bhorat, Haroon & Köhler, Timothy, 2025. "The labour market effects of cash transfers to the unemployed: Evidence from South Africa," World Development, Elsevier, vol. 188(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erten, Bilge & Leight, Jessica & Tregenna, Fiona, 2019. "Trade liberalization and local labor market adjustment in South Africa," Journal of International Economics, Elsevier, vol. 118(C), pages 448-467.
    2. Andrew Kerr & Martin Wittenberg & Jairo Arrow, 2014. "Job Creation and Destruction in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 1-18, March.
    3. Karaivanov, Alexander & Yindok, Tenzin, 2022. "Involuntary entrepreneurship – Evidence from Thai urban data," World Development, Elsevier, vol. 149(C).
    4. Rafael P. Ribas, 2014. "Liquidity Constraints, Informal Financing, and Entrepreneurship: Direct and Indirect Effects of a Cash Transfer Programme," Working Papers 131, International Policy Centre for Inclusive Growth.
    5. Eliane Badaoui & Olivier Bargain & Prudence Magejo & Eric Strobl & Frank Walsh, 2023. "A Search Model with Self-Employment and Heterogeneity in Managerial Ability," EconomiX Working Papers 2023-9, University of Paris Nanterre, EconomiX.
    6. Kishan Shah, 2022. "Diagnosing South Africa’s High Unemployment and Low Informality," CID Working Papers 138a, Center for International Development at Harvard University.
    7. Nezih Guner & Alessandro Ruggieri, 2021. "Misallocation and inequality," Discussion Papers 2021/01, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    8. Andrew Kerr, 2018. "Job Flows, Worker Flows and Churning in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 86(S1), pages 141-166, January.
    9. Kishan Shah, 2022. "Diagnosing South Africa’s High Unemployment and Low Informality," Growth Lab Working Papers 193, Harvard's Growth Lab.
    10. Feng, Ying & Ren, Jie, 2023. "Skill bias, financial frictions, and selection into entrepreneurship," Journal of Development Economics, Elsevier, vol. 162(C).
    11. Levinsohn, James & Pugatch, Todd, 2014. "Prospective analysis of a wage subsidy for Cape Town youth," Journal of Development Economics, Elsevier, vol. 108(C), pages 169-183.
    12. Anurag Banerjee & Parantap Basu & Elisa Keller, 2023. "Cross‐country disparities in skill premium and skill acquisition," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 179-198, January.
    13. Björn Nilsson, 2019. "The School-to-Work Transition in Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 55(5), pages 745-764, May.
    14. Dieter von Fintel, 2016. "Wage flexibility in a high unemployment regime: spatial heterogeneity and the size of local labour markets," Working Papers 09/2016, Stellenbosch University, Department of Economics.
    15. Dieter von Fintel, 2017. "Institutional wage-setting, labour demand and labour supply: Causal estimates from a South African pseudo-panel," Development Southern Africa, Taylor & Francis Journals, vol. 34(1), pages 1-16, January.
    16. Rahul Anand & Siddharth Kothari & Naresh Kumar, 2016. "South Africa: Labor Market Dynamics and Inequality," IMF Working Papers 2016/137, International Monetary Fund.
    17. Ricardo Hausmann & Tim O'Brien & Andres Fortunato & Alexia Lochmann & Kishan Shah & Lucila Venturi & Sheyla Enciso & Ekaterina Vashkinskaya & Ketan Ahuja & Bailey Klinger & Federico Sturzenegger & Mar, 2023. "Growth Through Inclusion in South Africa," Growth Lab Working Papers 222, Harvard's Growth Lab.
      • Ricardo Hausmann & Tim O'Brien & Andres Fortunato & Alexia Lochmann & Kishan Shah & Lucila Venturi & Sheyla Enciso & Ekaterina Vashkinskaya & Ketan Ahuja & Bailey Klinger & Federico Sturzenegger & Mar, 2023. "Growth Through Inclusion in South Africa," CID Working Papers 434, Center for International Development at Harvard University.
    18. Mohimont, Jolan, 2022. "Welfare effects of business cycles and monetary policies in a small open emerging economy," Journal of Economic Dynamics and Control, Elsevier, vol. 136(C).
    19. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    20. Francesco Amodio & Michele Di Maio & Yifan Li & Patrizio Piraino, 2020. "Product market competition and the labour market: Evidence from South Africa," WIDER Working Paper Series wp-2020-39, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    informal sector; developing country; South Africa; employment;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctw:wpaper:202403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Waseema Petersen The email address of this maintainer does not seem to be valid anymore. Please ask Waseema Petersen to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/dpuctza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.