Title: Unemployment and economic growth in South Africa: a re-examination

Authors: Zodwa Xesibe; Sheilla Nyasha

Addresses: Graduate School of Business Leadership (SBL), University of South Africa, P.O. Box 392, UNISA, 0003, South Africa ' Graduate School of Business Leadership (SBL), University of South Africa, P.O. Box 392, UNISA, 0003, South Africa

Abstract: In this study, we have empirically examined the impact of unemployment on economic growth in South Africa, using time series data from 1994Q1 to 2017Q4. The study made use of the error correction model in determining the relationship between unemployment and economic growth. In addition to economic growth and unemployment, four control variables were added to the model. These were government expenditure, inflation, investment and household final consumption expenditure. Using the error correction model (ECM), the results of the study reveal that there is a negative relationship between unemployment and economic growth in South Africa. An increase in unemployment in South Africa would reduce the rate of economic growth. Based on the research findings, where unemployment was found to have a negative impact on economic growth in the study country, the South African authorities responsible for economic policy are recommended to formulate and enhance policies that aim at reducing unemployment in the country.

Keywords: unemployment; economic growth; South Africa.

DOI: 10.1504/IJSE.2020.110261

International Journal of Sustainable Economy, 2020 Vol.12 No.2, pp.101 - 116

Received: 29 Jul 2019
Accepted: 21 Dec 2019

Published online: 12 Oct 2020 *

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