Individual, Household and Regional Determinants of Labour Force Attachment in South Africa: Evidence from the 1997 October House

A narrow unemployment rate of 21.2% and a broad unemployment rate of 36% in 1997 in South Africa indicate a substantial number of working age people who did not work in the last seven days but would accept a job even though they were not actively searching for work. Under the narrow or strict unemployment definition these people would not be counted as part of the labour force. This definition assumes that individuals voluntarily choose to give up searching. In this paper, we consider non-searching unemployment as a degree of labour force participation or attachment that is lower than searching unemployment but higher than being out of the labour force, and try to identify determinants that render a person more likely to be in one of these labour market states. Individual, household, and community level characteristics are taken into account. We also estimate multinomial logit models for jobless African men and women. Using 1997 household survey data, descriptive and econometric analysis finds non-searching individuals to be particularly distinct from those out of the labour force and regional characteristics to play a major role in the experience of joblessness. In particular, high magisterial district unemployment rates appear to discourage active search and coincide with a high proportion of non-searching unemployed in former homeland areas. A final section of the paper discusses the implications of these findings for policy proposals surrounding the unemployment and social security debate in South Africa.