Annual Forum Papers

Distribution, Investment and Employment in South Africa

  • Year: 2000
  • Publication Author(s): James Heintz

This paper examines how distributive outcomes and unresolved distributive conflicts affect the rate of productive investment and what the implications are for the level of joblessness people face in South Africa. The link between investment and employment is developed within a context of "Keynesian" and "classical" unemployment. Using time-series and cross-sectional data, estimates of the relative importance of different determinants of the rate of investment in South Africa show strong robust effects from profit rates, economic growth, and the degree of social and political conflict. The results support the argument that both distributive outcomes and distributive conflicts are important influences on the rate investment. A short discussion of policy implications concludes the paper.