Developing a Youth Labour Market Index for South Africa at the Sub-National Level

Assessing the labour market situation for young people is a critical area of research that has attracted the attention of scholars and policymakers globally. However, understanding the complexity of the labour market for youth, particularly in developing countries, requires a comprehensive, multidimensional approach. We address this need by developing a Youth Labour Market Index for South Africa (SA YLMI). The study builds on the work of international scholars as Renold et al. (2014), Pusterla (2015) and Kudrzycki et al. (2020), allowing us, to some degree, to benchmark our findings against those for a group of lower-middle and low-income countries. The SA YLMI incorporates ten indicators that capture the unique, South African youth labour market situation. Drawing on nationally representative data from the Quarterly Labour Force Survey for the period 2013-2023, the YLMI provides a nuanced understanding of the labour market for 15-35-year-olds, and allows for the identification of variations in the labour market’s functionality for various subgroups of the youth population. The study reveals alarmingly low YLMI scores for South Africa and its nine provinces, which have decreased over time. Significant gender and rural-urban disparities in the distribution of the YLMI scores are observed. Further analysis reveals that the working conditions and education dimensions are the primary contributors to the low YLMI score, highlighting their role as major drivers of the underperforming youth labour market. Specifically, relative unemployment, skills mismatch, vulnerable employment, and lack of secondary education are key contributors to the low scores, with vulnerable employment particularly critical. These results highlight that the South African labour market for youth is highly dysfunctional. A defunct labour market entrenches inequality by contributing to further unemployment, pointing to an urgent need for policymakers to address the situation.