Trade and Industry

Emigration of highly skilled people has become an increasing concern in South Africa. While it is uncontested that such emigration can have detrimental effects in the form of a brain drain, this policy brief argues that South Africa could also draw some benefits from this emigration. It recommends that the country resumes its efforts to tap into the huge potential offered by its expatriate communities.

  • Year 2012
  • Publication Author(s) Thomas Höppli
Published in Policy Briefs

Globally, a rapid increase of mobile tertiary education seekers has been observed. In 2005, more than 2.7 million tertiary education students were studying in a country other than their own, representing an increase of about 61% since 1999.  Trade in education services is increasingly becoming important worldwide. Saner and  Fasel (2003)* observe that the value of annual trade in higher education services was estimated at US$30 billion, which was 50% of trade in financial services.

  • Project SADRN
  • Year 2011
Published in Policy Briefs

A number of factors have propelled the rapid demand for foreign higher education services. These include the need for internationally recognised qualifications, the demand for highly skilled labour in both developed and developing countries, and the inclination by several countries towards promoting foreign collaborations to improve the quality of domestic higher education.

  • Project SADRN
  • Year 2011
Published in Policy Briefs

Session 3B: Measuring Social and Education Progress

  • Year 2010
  • Organisation University of KwaZulu-Natal
  • Publication Author(s) Justin Visagie
  • Countries and Regions South Africa

Session 3B: Measuring Social and Education Progress

  • Year 2010
  • Organisation University of Western Cape; University of Stellenbosch; University of the Western Cape; University of the Western Cape
  • Publication Author(s) Zwakele Dlomo; Ada Jansen; Mariana Moses; Derek Yu
  • Countries and Regions South Africa

Session 8A: Wage Dynamics

  • Year 2010
  • Organisation University of KwaZulu-Natal
  • Publication Author(s) Daniela Casale; Dorrit Posel
  • Countries and Regions South Africa

Session 2A: Scarce Skills

  • Year 2010
  • Organisation MERSETA
  • Publication Author(s) Salim Akoojee
  • Countries and Regions South Africa

Session 2A: Scarce Skills

  • Year 2010
  • Organisation Jet Educational Services
  • Publication Author(s) Anthony Gewer
  • Countries and Regions South Africa

Session 2A: Scarce Skills

  • Year 2010
  • Organisation University of Pretoria
  • Publication Author(s) Andrew Merrifield
  • Countries and Regions South Africa

In the era of globalisation, there is widespread recognition that knowledge-based industries have become a significant contributor to economic growth and development. To be internationally competitive in a global economy requires the creation of distinctive assets such as knowledge, skills, innovation and creativity.

Knowledge has become an internationally recognized factor of production with the new form of capital being the capacity to generate, assimilate, disseminate and effectively use knowledge. Because knowledge forms the basis of technological progress, innovation and the enhancement of human capital, knowledge is recognized as a significant contributor to economic growth and development.

  • Year 2009
  • Organisation TIPS
  • Publication Author(s) M. Nyambe, J. , Walubita, B. and du Plessis, C
  • Countries and Regions Namibia

Trade in services generally is viewed as a potentially viable option to contribute to the much needed economic diversification in Botswana. This study is informed by the ongoing policy discussions about the need to develop an educational hub in Botswana. It is intended to be a constructive contribution to these policy discussions. We analyse trends in tertiary education trade. Both exports and imports of tertiary education are discussed. The study does an audit of the policies, regulations and institutions in the education sector with the view to assess their readiness to support the establishment and maintenance of an education hub. The data we use are obtained mainly from the Government of Botswana, which grants most of the scholarships to citizens studying in different countries across the globe. Other information is obtained from the local tertiary institutions, which offer education mainly to citizens but do enrol a few foreign students. Also, the study discusses the trade arrangements that Botswana is party to and makes an assessment of how they can assist (or inhibit) Botswana's endeavours to develop and education hub. The study is intended for policy makers and it is hoped that it will promote productive policy direction.

  • Year 2009
  • Organisation Services Sector Development Thematic Working Group; TIPS, BIDPA and UoM
  • Publication Author(s) Johnson Tsoro Maiketso
  • Countries and Regions Botswana

In the era of globalisation, there is widespread recognition that knowledge-based industries have become a significant contributor to economic growth and development. To be internationally competitive in a global economy requires the creation of distinctive assets such as knowledge, skills, innovation and creativity. Knowledge has become an internationally recognized factor of production with the new form of capital being the capacity to generate, assimilate, disseminate and effectively use knowledge. Because knowledge forms the basis of technological progress, innovation and the enhancement of human capital, knowledge is recognized as a significant contributor to economic growth and development.

  • Year 2009
  • Organisation Services Sector Development Thematic Working Group; TIPS, BIDPA and UoM
  • Publication Author(s) Kara Mackay
  • Countries and Regions South Africa

This paper investigates the relationship between education and unemployment in post-apartheid South Africa, and probes the argument that employment growth has been inhibited particularly by skills constraints. We use probit regression analysis to show that higher education protected against unemployment in both 1995 and 2003, and that overall, the relative benefits to tertiary education rose over the period. We show also that these aggregate trends mask substantial variation among race groups and within race groups, among men and women. However, after taking into account changes in the survey instruments used to measure employment, we find only modest evidence of skills-intensive employment growth. Rather, the increase in formally qualified labour was considerably larger than the increase in demand for skilled and semi-skilled labour over the period, and so unemployment rates even among graduates increased over the period.

  • Year 2006
  • Publication Author(s) Dorrit Posel and Rosa Dias
  • Countries and Regions South Africa

This paper empirically contributes towards the debate between the human capital and screening theories. Using South Africa's September 2004 Labour Force Survey data, and after controlling for self-selection, the weak and strong versions of screening hypothesis are tested. The honour's degree, and certificates or diplomas got without grade twelve, provide evidence for the SSH for both public and private sectors, as per the Wolpin (1977) methodology. The same methodology yield evidence in support of the WSH, at the masters and beyond certificate levels in the private sector, but stretching lower to include all other credentials up to and including certificates or diplomas got after grade twelve, in the public sector. Support for the WSH as per the Psacharopoulos (1979) methodology, prevails across the certificate levels, for the entire screened sample. The human capital theory, per se, is supported in the private sector for credentials below the honour's, except for certificates or diplomas got without grade twelve. There is no evidence to support the use of education entirely for its skills bestowing role in the public sector. Results from the Altonji and Pierret (1996) methodology do not also confirm any post-employment screening, whatever the sector. (Words :194)

  • Year 2006
  • Publication Author(s) Steven F Koch and Simon Ssekabira Ntege
  • Countries and Regions South Africa

We examine the effect of orphan status on school enrolment in Zimbabwe, a country strongly impacted by the HIV/AIDS pandemic with a rapidly growing population of orphans. Using data from 2003, after controlling for other determinants of enrolment we find that orphans are less likely to attend school than non-orphans. The result is robust to our correction for selection bias.Two additional results have implications for targeting: we find that the effect of being an orphan is especially large for older children and that, after controlling for previous education, the effect of being an orphan on school enrolment is sharply diminished.

  • Year 2004
  • Publication Author(s) Craig Gundersen; Thomas Kelly; Kyle Jemison
  • Countries and Regions Zimbabwe

There is significant consensus that unemployment and more generally, exclusion from the labour market,is the central socio-economic problem in South Africa. Joblessness is strongly implicated in such socio-economic problems as crime, poverty, alcoholism, HIV-AIDS, and even poor educational outcomes and low skill levels (see for example Bhorat etal.2001; Fryer and Vencatachellum, 2004; Nattrass, 2003).The literature flowing from household survey data has however tended to confine itself to measuring unemployment and its consequences. In doing this, it tends to treat unemployment as something that happens to individuals and communities. However, factors such as unemployment and poverty will have obvious feedback effects on the current capabilities of individuals, on the intergenerational transmission of capital (and especially human capital) and on social and market structure. Below critical threshold levels, such factors can generate market and coordination failures. The distortions generated by unemployment can become endogenized in the sense that they become part of the cause of unemployment. To date, there is no clear understanding in the South African literature as to whether such endogenous factors are important and how they interact with other factors such as so-called imposed distortions (caused, for example by labour legislation and union wage premia) and other macroeconomic causes of unemployment.Section 2 sets out the theoretical case in slightly more detail.

  • Year 2004
  • Publication Author(s) David Fryer
  • Countries and Regions South Africa

Poverty in South Africa is severe. Zero-rating food can possibly reduce poverty as poor households spend the largest proportion of their income on food. Zero-rating food can also reduce the regressiveness of Value Added Tax (VAT) for the same reason. However, zero-rating food will results in a loss in revenue for government. Zero-rating food should be considered in conjuction with alternative sources of revenue, such as increasing direct taxes proportionately or increasing VAT on all other commodities, or alternatively increasing VAT on commodity or services used mostly by high-income households. A Computable General Equilibrium (CGE) model is used to analyze the combined effect on zero-rating food and using alternative revenue sources to compensate for the loss in revenue. The results indicate that zero-rating food, while increasing VAT on either business or financial services could turn a regressive VAT into a progressive VAT. However, this would require excessive high increases in the statutory VAT rates of these services. More realistic options investigated are increasing direct taxes, or alternatively increasing VAT on all other commodities to 16 percent. Increasing direct taxes is most successful in creating a more progressive tax structure, and still generating a positive impact on GDP. The results indicate that zero-rating food combined with a proportional percentage increase in direct taxes can improve the welfare of poor households, without impacting negatively on other households.

  • Year 2003
  • Publication Author(s) Marna Kearney

Under Government's GEAR policy, high levels of expenditure on social services (i.e. Social Development, Health, Education and Housing), failed to bring about a reduction in poverty and unemployment. The Government, in particular the National Treasury, blamed this outcome on the inefficiency in the delivery of social services. The "Left", especially COSATU and its civil society partners, however, claimed that Government's commitment to conservative deficit targets under GEAR resulted in deep cuts in spending on social services.

In this paper we examine the claim from the "Left" that social spending was cut under GEAR and that this reduction led to a decrease in the quantity and quality of social services. We first analyse budgeted as well as actual spending on social services during the GEAR period (1996/7 to 2000/01). Figures were adjusted for the effects of inflation and population growth. We also examine social spending's share of total expenditure and of Gross Domestic Product (GDP). We find that while budgeted and actual social spending and social spending as share of the budget increased, actual per capital social spending and social spending as share of GDP decreased over the period. We also find that social spending as share of GDP declined by less than total expenditure's share of GDP. The evidence is therefore not conclusive enough to substantiate the claim that social spending was drastically cut under GEAR.

Next we examine the trends in social service delivery during the period to form some preliminary impression of whether the quality and quantity of service delivery did decline over the GEAR period. Again, the data does not show clear evidence of a decline in the quality and quantity of services provided over the period.

Our analyses do not provide conclusive evidence for either Government's or COSATU's claims and this debate continues to influence other debates around issues like the introduction of a basic income grant, a minimum package of education services, the realisation of basic socio-economic rights and the redesign of the equitable share formula which directs funding to the provinces.

  • Year 2003
  • Publication Author(s) Albert Van Zyl; Carlene Van Der Westhuisen
  • Countries and Regions South Africa

This paper looks at social mobility in the context of a growing economy. The nature and extent of Black affluence in South Africa provides an indicator of the impact of efforts to eradicate the remnants of apartheid-era racial discrimination in the South African education system and labour market. Most studies examining social mobility and inequality in South Africa have looked at the bottom of the income distribution, investigating changes in the severity and also the racial incidence of poverty. This paper explores the same topic by studying the top of the income distribution. Focusing on the Black members of this group of affluent, this paper hopes to make some contribution towards an improved understanding of social mobility and inequality in South Africa

Firstly, we attempt to identify the features that distinguish the Black upwardly mobile from those parts of the Black population seemingly trapped in poverty, starting with a descriptive analysis of the affluent. Using the 2000 LFS/IES and the 1995 OHS/IES, the study examines the profile of the richest 15% of household in South Africa. In the second section of the paper logit and multinomial logit models are used to consider the impact of spatial features, household characteristics and the age, education and occupation of the household head on affluence. We also investigate how affluence predictors vary between different race groups. The third and last section is devoted to exploring the spending patterns of the Black affluent.

The analysis here confirms many of the traditional views of social mobility. The paper finds a strong association between geography, demographic profile and social mobility that is robust across population groups. The empirical evidence cited is consistent with convex returns to education and a substantial role for quality of education.

Also, we find that the Black affluent exhibit distinctive spending patterns. Compared to the affluent from other population groups, the Black affluent spend more on appliances and furniture and less on personal computers, telecommunications and domestic workers. This may be due to their relatively new status among the affluent.

  • Year 2013
  • Publication Author(s) Rulof Burger; Ronelle Burger; Servaas van der Berg
  • Countries and Regions South Africa
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