LMI programme > Briefings

Occupational shifts and skills challenges facing the South African economy

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Publication year:


Corporate author/s:

University of Cape Town; Labour Market Intelligence Partnership (LMIP), Human Sciences Research Council (HSRC) and the Department of Higher Education and Training (DHET)

Person/s author/s:

Bhorat, Haroon; Oosthuizen, Morne;; Cassim, Aalia


briefing or fact sheet



Despite robust economic growth over much of the past 20 years, South Africa still faces significant challenges in terms of high unemployment, poverty and inequality. One view of what underlies persistently high unemployment rates is that the economy has demanded high-skilled workers despite the labour force having an abundance of low-skilled, less educated workers. A mismatch in the types of labour demanded by firms and supplied by workers has therefore contributed to high unemployment for less-skilled workers. Bhorat et al. (2013) 1 examined this notion through the changing nature of occupational labour market trends in South Africa and the resulting impact on wages. The skills bias of South African economic growth had already been established pre-1994. The result has been an increasing wage premium for high-skilled workers - and the opposite for low-skilled workers - in jobs impacted by technological change and global competition. Skills-biased labour demand therefore underpins wage inequality, the main determinant of income inequality, one of the central challenges facing post-apartheid policy-making.

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