Abstract
This dissertation empirically assesses the impact of South Africa’s policy approach to skills development on output and labour productivity for the period 2001 to 2015. Skills development is considered within the framework of endogenous growth theory, which assumes that human capital accumulation raises the productivity of both labour and physical capital. Human capital is represented by employment shares of low-skilled, semi-skilled and skilled labour. In order to assess whether human capital development initiatives, proxied by individuals trained, have contributed to output and productivity, it is considered as an additional variable of interest. Employing a panel data fixed effects regression analysis, the results indicate that the different levels of skilled labour have a significant effect on output and labour productivity. Skilled labour and low-skilled labour present a positive and significant relationship to output; semi-skilled labour is positively related to output, whilst negatively related to labour productivity. The skills development levies variable was found to be positive and significant across the regression models, which suggests that investment in education and skills development may contribute to economic growth. However, the training variable shows no significant impact on the economy.
M.Com. (Development Economics)