scholarly journals The Impact of Productivity, Investment and Real Wages on Employment Absorption Rate in South Africa

2019 ◽  
Vol 8 (12) ◽  
pp. 330 ◽  
Author(s):  
Thomas Habanabakize ◽  
Daniel Francois Meyer ◽  
Judit Oláh
Keyword(s):  
South Africa ◽  
South African ◽  
Absorption Rate ◽  
Labour Productivity ◽  
Series Data ◽  
The South ◽  
Real Wages ◽  
Long Run ◽  
Investment Spending ◽  
The Impact

Many developing countries are facing high levels of unemployment and most people who are employed are poorly remunerated due to low skills and productivity levels. Although jobs are important, a productive job is even more important, not only for employees, but also for employers. South Africa, being a developing country, is also facing the challenge of dramatically high levels of unemployment. This study’s aim was to examine both the short- and long-term impacts of real wages, labour productivity and investment spending on employment absorption rates in South Africa. To establish the existing relationship between variables, the study applied several econometric approaches, such as an autoregressive distributed lag (ARDL) model, error correction model (ECM) and a Toda–Yamamoto causality analysis on quarterly time series data from 1995Q1 to 2019Q1. The results revealed the existence of both short- and long-run relationships among the variables. While a positive relationship was found between employment absorption, investment spending and labour productivity, it was found that real wages negatively impact on long-run employment absorption rates. Additionally, the short-run analysis indicated that the lagged employment absorption rate influences the current rate of employment. Furthermore, the causality tests indicated that a bi-directional causal relationship exists between employment absorption and investment spending; and a uni-directional relationship between employment and both real wages and labour productivity. Based on the findings, the study recommends increments of investment spending and labour productivity that enables the South African economy to carry out more activities that would require more workers, thereby improving the employment absorption rate. The fact that labour productivity positively impacts the employment absorption rate infers the requirement for quality and skilled workers to be absorbed in the South African labour market. Therefore, labour skills improvements appear to be a prerequisite for productivity enhancement and job creation.

scholarly journals The impact of economic growth on unemployment in South Africa: 1994 – 2012

2015 ◽  
Vol 12 (4) ◽  
pp. 699-707
Author(s):  
Handson Banda ◽  
Ireen Choga
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
South African ◽  
Time Series Data ◽  
Positive Impact ◽  
Labour Productivity ◽  
Real Effective Exchange Rate ◽  
Series Data ◽  
Long Run ◽  
The Impact

One of the most pressing problems facing the South African economy is unemployment, which has been erratic over the past few years. This study examined the impact of economic growth on unemployment, using quarterly time series data for South Africa for the period 1994 to 2012.Johansen Co-integration reflected that there is stable and one significant long run relationship between unemployment and the explanatory variables that is economic growth (GDP), budget deficit (BUG), real effective exchange rate (REER) and labour productivity (LP). The study utilized Vector Error Correction Model (VECM) to determine the effects of macroeconomic variables thus REER, LP, GDP and BUG on unemployment in South Africa. The results of VECM indicated that LP has a negative long run impact on unemployment whilst GDP, BUG and REER have positive impact. The study resulted in the following policy recommendation: South African government should re-direct its spending towards activities that directly and indirectly promote creation of employment and decent jobs; a conducive environment and flexible labour market policies or legislations without impediments to employment creation should be created; and lastly government should prioritise industries that promote labour intensive. All this will help in absorbing large pools of the unemployed population thereby reducing unemployment in South Africa.

scholarly journals The impact on the South African economy of alternative regulatory arrangements in the petroleum sector

2020 ◽  
Author(s):  
Heinrich Bohlmann ◽  
Rod Crompton
Keyword(s):  
South Africa ◽  
South African ◽  
Computable General Equilibrium ◽  
Impact Analysis ◽  
Computable General Equilibrium Model ◽  
The South ◽  
Real Wages ◽  
Fuel Price ◽  
Parity Price ◽  
The Impact

This paper adds quantitative analysis to the study by Crompton et al. (2020), in which various alternative regulatory arrangements regarding the petrol price in South Africa were explored. We use a multi-sector dynamic computable general equilibrium model for South Africa to conduct our economic impact analysis. Five scenarios are modelled, first individually to correctly calibrate the shocks, and then cumulatively to find the overall economy-wide effects of the proposed reforms. Under the most comprehensive set of reforms to the determination of petrol prices, which seeks to emulate market forces, the South African economy is seeing substantial benefits. GDP is expected to rise by 0.67 per cent and real wages by over 1.1 per cent relative to the baseline. Refineries are assumed to shrug off reforms targeted at removing pure profits earned via the import parity price (Basic Fuel Price) methodology by accepting a slightly lower rate of return, enabling them to meet the expected increase in demand for petrol on the back of the lower consumer prices achieved via the reforms. Whilst job losses at fuel service stations may be expected as a result of reduced revenues and margins, increased activity and job opportunities in the rest of the economy, facilitated through cheaper trade and transport margins, will more than offset those losses.

scholarly journals Cointegration and stock market interdependence: Evidence from South Africa, India and the USA

2015 ◽  
Vol 18 (4) ◽  
pp. 475-485 ◽  
Author(s):  
Mohanasundaram Thangamuthu ◽  
Karthikeyan Parthasarathy
Keyword(s):  
South Africa ◽  
Stock Market ◽  
South African ◽  
Stock Markets ◽  
Predictive Ability ◽  
Series Data ◽  
The South ◽  
Long Run ◽  
The Usa ◽  
Short Run

The purpose of this study is to explore the nature of the association and the possible existence of a shortrun and long-run relationship between the stock-market indices of South Africa, India and the USA. The idea behind this combination is to know how the stock markets of these three prominent countries are related to each other. The study employs monthly data from the stock indices, namely JALSH (South Africa), NIFTY (India) and NASDAQ (USA) composite from April 2004 to March 2014. After testing for the normality of the data distribution and the stationarity of the time series data, this paper discovered a strong correlation between the stock market indices of South Africa, India and the USA. The correlation among the stock markets is high, particularly between South Africa and India. In addition, the paper attempts to discover the presence of any predictive ability among these markets by applying the Granger causality test. The result indicates that the NASDAQ index has no predictive ability as far as the JALSH and NIFTY indices are concerned. However, the JALSH index has a predictive ability on the NIFTY index. After testing the Granger cause relationship, the existence of a long-run and short-run relationship is tested. The long-run relationships among the stock market indices are analysed, following the Johansen and Juselius multivariate cointegration approach. The result suggests the absence of a long-run relationship among the three stock market indices. Short-run relationship is investigated with the Vector Autoregression (VAR) model, and the outcome obtained shows that both the USA and the South African stock markets are predicted only by their own past lags. However, the Indian stock market is seen to be a function of its own past lags and the past lags of the South African stock index. 

scholarly journals Achieving Food Security in a Climate Change Environment: Considerations for Environmental Kuznets Curve Use in the South African Agricultural Sector

Climate ◽  
2019 ◽  
Vol 7 (9) ◽  
pp. 108 ◽  
Author(s):  
Ngarava ◽  
Zhou ◽  
Ayuk ◽  
Tatsvarei
Keyword(s):  
Climate Change ◽  
South Africa ◽  
Energy Consumption ◽  
South African ◽  
Co2 Emissions ◽  
Agricultural Sector ◽  
Series Data ◽  
The South ◽  
Agricultural Income ◽  
Long Run

This study relates agricultural income and agricultural carbon dioxide (CO2) emissions in the context of environmental Kuznets curves for South Africa. We posit likely relationships between UN Sustainable Development Goals (SDG) 1, 2 and 13, relating food production to climate change action. CO2 emissions, income, coal energy consumption and electricity energy consumption time series data from 1990 to 2012 within the South African agricultural sector were used. The autoregressive distributive lag bounds-test and the error correction model were used to analyse the data. The results show long-run relationships. However, agricultural income was only significant in the linear and squared models. Changes in agricultural CO2 emissions from the short run towards the long run are estimated at 71.9%, 124.7% and 125.3% every year by the linear, squared and cubic models, respectively. Exponentially increasing agricultural income did not result in a decrease in agricultural CO2 emissions, which is at odds with the Kuznets hypothesis. The study concludes that it will be difficult for South Africa to simultaneously achieve SDGs 1, 2 and 13, especially given that agriculture is reliant upon livestock production, the largest CO2 emitter in the sector. The sector needs to shift to renewable energy consumption with fewer CO2 emissions.

scholarly journals The impact of economic growth on unemployment in South Africa: 1994-2012

2016 ◽  
Vol 13 (2) ◽  
pp. 246-255 ◽  
Author(s):  
Handson Banda ◽  
Hlanganipai Ngirande ◽  
Fortune Hogwe
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
South African ◽  
Time Series Data ◽  
Series Data ◽  
Vector Error Correction ◽  
Flexible Labor ◽  
Long Run ◽  
The Unemployed ◽  
The Impact

One of the most pressing problems facing the South African economy is unemployment, which has been erratic over the past few years. This paper analyzed the impact of economic growth on unemployment, using quarterly South African time series data from 1994-2012. The results of Johansen cointegration reflected that a long run equilibrium or relationship exists among the variables. In ascertaining the effects of macroeconomic variables thus REER, LP, GDP and BUG on unemployment in South Africa, the study utilized vector error correction model (VECM). The results of VECM indicated that GDP, BUG and REER have positive long run impact on unemployment whilst LP negatively impact unemployment. The study resulted in the following policy recommendation: South African government should redirect its spending towards activities that directly and indirectly promote creation of employment and decent jobs, a conducive environment and flexible labor market policies or legislations without impediments to employment creation should be created, and lastly government should prioritize industries that promote labor intensive. All this will help in absorbing large pools of the unemployed population thereby reducing unemployment in South Africa

The impact of climate temperature on counts, recovery, and death rates due to SARS-CoV-2 in South Africa. (Preprint)

2020 ◽  
Author(s):  
Neven Chetty ◽  
Bamise Adeleye ◽  
Abiola Olawale Ilori
Keyword(s):  
South Africa ◽  
South African ◽  
Death Rate ◽  
Western Cape ◽  
Warm Climate ◽  
The South ◽  
Recovery Rates ◽  
Death Rates ◽  
Online Resource ◽  
The Impact

BACKGROUND The impact of climate temperature on the counts (number of positive COVID-19 cases reported), recovery, and death rates of COVID-19 cases in South Africa's nine provinces was investigated. The data for confirmed cases of COVID-19 were collected for March 25 and June 30, 2020 (14 weeks) from South Africa's Government COVID-19 online resource, while the daily provincial climate temperatures were collected from the website of the South African Weather Service. Our result indicates that a higher or lower climate temperature does not prevent or delay the spread and death rates but shows significant positive impacts on the recovery rates of COVID-19 patients. Thus, it indicates that the climate temperature is unlikely to impose a strict limit on the spread of COVID-19. There is no correlation between the cases and death rates, an indicator that no particular temperature range is closely associated with a faster or slower death rate of COVID-19 patients. As evidence from our study, a warm climate temperature can only increase the recovery rate of COVID-19 patients, ultimately impacting the death and active case rates and freeing up resources quicker to enable health facilities to deal with those patients' climbing rates who need treatment. OBJECTIVE This study aims to investigate the impact of climate temperature variation on the counts, recovery, and death rates of COVID-19 cases in all South Africa's provinces. The findings were compared with those of countries with comparable climate temperature values. METHODS The data for confirmed cases of COVID-19 were collected for March 25 and June 30 (14 weeks) for South African provinces, including daily counts, death, and recovery rates. The dates were grouped into two, wherein weeks 1-5 represent the periods of total lockdown to contain the spread of COVID-19 in South Africa. Weeks 6-14 are periods where the lockdown was eased to various levels 4 and 3. The daily information of COVID-19 count, death, and recovery was obtained from South Africa's Government COVID-19 online resource (https://sacoronavirus.co.za). Daily provincial climate temperatures were collected from the website of the South African Weather Service (https://www.weathersa.co.za). The provinces of South Africa are Eastern Cape, Western Cape, Northern Cape, Limpopo, Northwest, Mpumalanga, Free State, KwaZulu-Natal, Western Cape, and Gauteng. Weekly consideration was given to the daily climate temperature (average minimum and maximum). The recorded values were considered, respectively, to be in the ratio of death-to-count (D/C) and recovery-to-count (R/C). Descriptive statistics were performed for all the data collected for this study. The analyses were performed using the Person’s bivariate correlation to analyze the association between climate temperature, death-to-count, and recovery-to-count ratios of COVID-19. RESULTS The results showed that higher climate temperatures aren't essential to avoid the COVID-19 from being spread. The present results conform to the reports that suggested that COVID-19 is unlike the seasonal flu, which does dissipate as the climate temperature rises [17]. Accordingly, the ratio of counts and death-to-count cannot be concluded to be influenced by variations in the climate temperatures within the study areas. CONCLUSIONS The study investigates the impact of climate temperature on the counts, recovery, and death rates of COVID-19 cases in all South Africa's provinces. The findings were compared with those of countries with comparable climate temperatures as South Africa. Our result indicates that a higher or lower climate temperature does not prevent or delay the spread and death rates but shows significant positive impacts on the recovery rates of COVID-19 patients. Warm climate temperatures seem not to restrict the spread of the COVID-19 as the count rate was substantial at every climate temperatures. Thus, it indicates that the climate temperature is unlikely to impose a strict limit on the spread of COVID-19. There is no correlation between the cases and death rates, an indicator that there is no particular temperature range of the climatic conditions closely associated with a faster or slower death rate of COVID-19 patients. However, other shortcomings in this study's process should not be ignored. Some other factors may have contributed to recovery rates, such as the South African government's timely intervention to announce a national lockout at the early stage of the outbreak, the availability of intensive medical care, and social distancing effects. Nevertheless, this study shows that a warm climate temperature can only help COVID-19 patients recover more quickly, thereby having huge impacts on the death and active case rates.

scholarly journals Analysis of the Keynesian Theory of Employment and Sectoral Job Creation: The Case of the South African Manufacturing Sector

2018 ◽  
Vol 18 (1) ◽  
pp. 123-143
Author(s):  
Thomas Habanabakize ◽  
Paul-Francois Muzindutsi
Keyword(s):  
South African ◽  
Manufacturing Sector ◽  
Job Creation ◽  
The South ◽  
Economic Sectors ◽  
Vector Autoregressive ◽  
Integration Approach ◽  
Long Run ◽  
Short Run ◽  
Investment Spending

Abstract The manufacturing sector is one of the backbones of the South African economy, and yet is one of the economic sectors facing challenges in job creation. This study analysed the long-run and short-run effects of aggregate expenditure components on job creation in the South African manufacturing sector. A Vector Autoregressive (VAR) with Johansen co-integration approach was used to analyse quarterly data from 1994 to 2015. The findings are that there is a long-run relationship between aggregate expenditure and job creation in the South African manufacturing sector, with government and investment spending being the major components of aggregate expenditure that create jobs in the South African manufacturing sector. Conversely, consumption spending destroys jobs in the manufacturing sector, while net exports have no significant effect on job creation. The short-run relationship between variables was not significant. Recommendations are that more effort should be put into investment spending, and government should spend more on investment than on consumption spending - in order to increase job creation in the manufacturing sector.

scholarly journals The Contribution of Foreign Direct Investment (FDI) To Domestic Employment Levels in South Africa: A Vector Autoregressive Approach

2019 ◽  
Vol 11 (1(J)) ◽  
pp. 110-121
Author(s):  
Bongumusa Prince Makhoba, ◽  
Irrshad Kaseeram
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Least Squares ◽  
South African ◽  
Empirical Analysis ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Series Data ◽  
The South ◽  
Vector Autoregressive

Several empirical works have yielded mixed and controversial results with regard to the effects of FDI on employment and economic growth. The primary focus of this study is to investigate the contribution of FDI to domestic employment levels in the context of the South African economy. The analyses of the study were carried out using the annual time series data from 1980 to 2015. The macroeconomic variables employed in the empirical investigation include employment, FDI, GDP, inflation, trade openness and unit labour costs. The study used secondary data from the South African Reserve Bank and Statistics South Africa database. The study estimated a Vector Autoregressive/ Vector Error Correction Mechanism (VAR/VECM) approach to conduct empirical analysis. However, the study also employed single equation estimation techniques, including the Ordinary Least Squares (OLS), Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and Canonical Cointegrating Regression (CCR) models as supporting tools to verify the VAR/VECM results. This study provides strong evidence of a significant negative relationship between FDI and employment levels in the South African economy. Empirical analysis of the study suggests that the effect of economic growth on employment is highly positive and significant in South Africa’s economy. The study recommends that policymakers ought to invest more in productive sectors that aim to promote economic growth and development to boost employment opportunities in South Africa.

scholarly journals How applicable is export-led growth and import-led growth hypotheses to South African economy?

2015 ◽  
Vol 4 (2) ◽  
pp. 15-24
Author(s):  
Ntebogang Dinah Moroke ◽  
Molebogeng Manoto
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Adverse Effect ◽  
Time Series ◽  
South African ◽  
Time Series Data ◽  
Series Data ◽  
Long Run ◽  
Reserve Bank ◽  
Equilibrium Relationship

This paper investigated exports, imports and the economic growth nexus in the context of South Africa. The paper sets out to examine if long-run and causal relationships exist between these variables. Quarterly time series data ranging between 1998 and 2013 obtained from the South African Reserve Bank and Quantec databases was employed. Initial data analysis proved that the variables are integrated at their levels. The results further indicated that exports, imports and economic growth are co-integrated, confirming an existence of a long-run equilibrium relationship. Granger causal results were shown running from exports and imports to GDP and from imports to exports, validating export-led and import-led growth hypotheses in South Africa. A significant causality running from imports to exports, suggests that South Africa imported finished goods in excess. If this is not avoided, lots of problems could be caused. A suggestion was made to avoid such problematic issues as they may lead to replaced domestic output and displacement of employees. Another dreadful ramification may be an adverse effect on the economy which may further be experienced in the long-run.

scholarly journals The impact of the credit legislation on consumers

2016 ◽  
Vol 6 (4) ◽  
pp. 503-509 ◽  
Author(s):  
Hlako Choma ◽  
Thifulufhelwi Cedric Tshidada ◽  
Tshegofatso Kgarabjang
Keyword(s):  
South Africa ◽  
South African ◽  
Consumer Protection ◽  
The Other ◽  
The South ◽  
Other Hand ◽  
Credit Agreement ◽  
Financial Obligation ◽  
The Impact ◽  
National Credit Act

The purpose of this paper is to examine two South Africa legislations dealing with over indebtedness of a consumer. It is clear that in terms of the South African law, section 129 (1) and 130 (3) of the National Credit Act provide that a creditor provider who wishes to enforce a debt under a credit agreement must first issue a section 129 (1) (a) notice to the consumer (the purpose of the notice is to notify the consumer of his/her arrears). On the other hand, the South African National Credit Act encourages the consumers to fulfil the financial obligations for which they are responsible. The second legislation to be examined which serve or appear to serve same purpose as the National Credit Act is the Insolvency Act. It therefore, postulated that the compulsory sequestration of a consumer in terms of the Insolvency Act would stand as an alternative remedy for a credit provider before she/he can have recourse mechanisms, such as debt review that are focused on satisfaction of the consumer’s financial obligation , in terms of the provisions of the National Credit Act. The paper determines to what extend these measures comply with the constitutional consumer protection demands. The legislature had been pertinently cognizant of the Insolvency Act when it lately enacted the National Credit Act. This is much apparent from the express amendment of section 84 of the Insolvency Act to the extent set out in schedule 2 of the National Credit Act

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