15 May 2014

South Africa: Cities Generate Jobs, Says South African Study

Photo: Abokoe Sibanda
Stellenbosch, South Africa

Effectively-managed cities can help provide jobs for South Africa's millions of unemployed young people, suggests a new report from one of the country's development think tanks.

In a study entitled "Cities of Hope", the Centre for Development and Enterprise (CDE) says that South Africa's largest cities generate the most growth and jobs.

"While many young people in the cities have no work, a significantly larger proportion have jobs than is the case elsewhere in the country," the study says. "Furthermore, young people who have jobs in the metros [large cities] are considerably more likely to be in formal employment than is the case in smaller cities or in rural areas."

The unemployment rate among young people in large cities is 35 percent, while in other cities it is 40 percent and in smaller towns it rises to 44 percent.

Young people in the large cities have better jobs than those elsewhere: "Fewer than one in five young people in the largest cities is employed in informal or domestic labour, compared with 25 percent in smaller cities and 30 percent in the non-city municipalities. ..

"This is the main reason why young people are moving to cities, and it suggests that South Africa's cities are places of (relative) hope. They bring youth closer to jobs and offer them services and educational opportunities, along with less tangible amenities such as entertainment and cultural activity.

"The concentration of youth in cities also provides benefits to society as a whole, as it creates agglomerations of skill, energy, innovation and talent."

Adopting a phrase coined by the Oxford University economist, Professor Paul Collier (who took part in the study), the report says cities are essential to the "miracle of productivity".

"Cities are places where people can combine their different skills to make things that would be beyond individual capacities.," the report adds.

"Residents can access and exchange skills, learn from each other, and transact more efficiently than would be possible in sparsely populated areas.

"While estimates differ, the per capita increase in productivity every time the size of a settlement doubles, is thought to be between three and six per cent. This means that cities have the potential to vastly increase the productivity and value of human labour relative to small towns and villages..."

The CDE's executive director, Anne Bernstein, said in a news release accompanying the report that "well-managed cities, with competitive business environments are by far the most effective platform for development that South Africa is likely to find. This is something that policymakers don't appreciate sufficiently...

"Our policymakers should be doing everything they can not only to reverse the anti-urban biases of apartheid, but to ensure more effective urban management and increased urbanisation... We need competitive, well-run cities in which to do business, as this will ensure that large numbers of young people can find work, start businesses and improve the quality of their lives."

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