Why Has Unemployment Risen In The New South Africa

The authors document the rise in unemployment in South Africa since the transition in 1994. They describe the likely causes of this increase and analyze whether the increase in unemployment is due to structural changes in the economy (resulting in a new equilibrium unemployment rate) or to negative shocks (that temporarily have increased unemployment). They conclude the former re more important. The analysis includes a multinomial logit approach to understanding transitions in individual-level changes in labor market status using the first nationally representative panel in South Africa. The analysis highlights several key constraints to addressing unemployment in South Africa.