Carnegie3 (Cape Town)

3 September 2012

South Africa: Design and Policy Implementation Issues in South Africa's Jobs Fund and Youth Wage Subsidy

Mamphela Ramphele, the founder of South Africa's Citizen's Movement, a former managing director of the World Bank, and a co-leader of the ... ( Resource: Mamphela Ramphele on Poverty And Inequality in South Africa

document

The South African Government is increasingly experimenting with the introduction of numerous policies and programs to fight what appears to be an obstinate unemployment problem.

Among the latest of the country's policy artilleries launched and proposed in the battle against joblessness are the Jobs Fund and Youth Wage Subsidy to complement existing Active labour Market Policies (ALMPs).

In particular, the youth wage subsidy continues to be the subject of controversy among politicians and trade unions over its desirability.

Effectively both the programs seek to provide temporary relief to employers by reducing the cost of acquiring and or training labour, particularly the youth.

Performance of similar programs internationally has been uneven over the years even leading to their abandonment. Evidence point to proper design and implementation as the key determinant of success.

However, the focus of policy makers in South Africa appears to be fixated on how these interventions increase jobs directly. Optimal design, not only ensures overall effectiveness but also minimises some common, unintended consequences associated with ALMPs. This study provides a review of South Africa's newly introduced ALMP programs against best international practices and the context of unemployment conditions. We conclude that in their current form the Jobs Fund and Youth Wage subsidy require some level of redesign to maximise labour market outcomes.

This is an abstract of a paper prepared for Towards Carnegie III, a major conference aimed at devising strategies to overcome poverty and inequality. Eddie Rakabe is from the Financial and Fiscal Commission.

Ads by Google

Copyright © 2012 Carnegie3. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.