Abstract
M.Com. (Development Economics)
The main purpose of this dissertation is to measure the employment intensity of the 46 sub-sectors in the South African economy. Three methods are considered: labour-capital ratios, labour value-added ratios and employment elasticity of output. In addition, two techniques, namely an arithmetic formula and a time-series regression model, are used in measuring employment elasticities of output.
Lack of knowledge of sub-sectors with high labour intensity may result in policy makers implementing industrial policies that do not necessarily meet their unemployment-reduction objectives. Policy makers can therefore use the results of this study to target certain sub-sectors for the purposes of employment creation.
The results of the labour-capital ratios show that the five (in ranking order) most labour-intensive sub-sectors in South Africa are ‘other producers’, civil engineering and other construction, building construction, trade, catering and accommodation services and wearing apparel. The results of the labour value-added ratios show that the five (in ranking order) most labour-intensive sub-sectors in South Africa are ‘other producers’, textiles, wearing apparel, civil engineering and other construction, as well as trade, catering and accommodation services . For the period 2011 to 2014 (latest period of analysis), the arithmetic calculation shows that the five (in ranking order) most labour-intensive sub-sectors in South Africa are other chemicals and man-made fibers, ‘excluding medical, dental and veterinary services’, wholesale and retail trade, building construction, as well as ‘other services’. The time-series model over the period 1971-2014 shows that the five (in ranking order) most labour- intensive sub-sectors in South Africa are ‘other producers’, civil engineering and other construction, television, radio and communication equipment, building construction , as well as transport and storage.
The composite measure (simple average of the rankings of these measures) shows that the seven (in ranking order) most labour-intensive sub-sectors in South Africa are ‘other producers’1, building construction, wholesale and retail trade , trade, catering and accommodation services, metals products excluding machinery, civil engineering and other construction, as well as textiles.