Abstract
The efficient integration of young people into the global job market is fundamental to sustainable development, significantly impacting economic stability, social unity, and demographic benefits. This study examines the determinants of youth labour absorption across key economic sectors in South Africa. The study uses the autoregressive distributed lag (ARDL) model to analyse sector-specific time-series data. The empirical findings show that youth labour market outcomes are influenced by both macroeconomic and microeconomic factors, with varying effects across economic sectors. The identified key determinants of youth labour absorption include economic growth, skills levels, labour costs, capital- or labour-intensity, profitability, and investment. In the manufacturing sector, for example, a rising capital-to-labour ratio was identified as one of the key constraints on youth labour absorption, while relatively low labour costs supported youth labour absorption in the community and social services sector. These sector-specific insights highlight the necessity of differentiated policy responses. Accordingly, the study recommends targeted strategies to promote inclusive economic growth, bridge skills mismatches, and encourage investment in labour-intensive industries.