EXPLAINING VARIABILITY IN THE LABOUR MARKET USING PRINCIPAL COMPONENT ANALYSIS

This article explores the factors driving labour market variability using principal component analysis (PCA) on data from 191 countries. With a focus on economic, demographic, and institutional variables, it aims to identify the primary components influencing labour market dynamics on a global level. Key variables include GDP per capita, Human Development Index (HDI), unemployment rates, poverty rates, indices on the labour freedom index and perception of corruption, average wages, and demographic indicators such as population structure and migration rates. Following data collection, the study employed multiple imputation to handle missing values, ensuring a robust dataset suitable for PCA. The PCA results reveal that the first principal component, comprising indicators of economic prosperity and human development, such as GDP per capita and HDI, explains the largest share of variability in the labour market data. Subsequent components, though contributing less individually, highlight structural factors, including average working hours, urbanization, and demographic influences like migration and age distribution. Together, these components suggest that high standards of living and economic stability play a critical role in shaping the labour market, while secondary factors like urban demographics and migration trends also impact labour dynamics. These findings support the hypothesis that economic and human development indicators significantly drive labour market variability. Implications for policymakers include focusing on economic stability and enhanced social outcomes to foster workforce engagement. The study underscores the importance of tailoring policies to account for demographic factors and calls for further research incorporating additional socioeconomic variables to deepen understanding of labour market dynamics

MUTUAL FEEDBACK SHOCKS BETWEEN ICT AND POVERTY IN SOUTH AFRICA

This study delves into the intricate relationship between information and communication technology (ICT) and poverty in the context of South Africa, exploring the mutual feedback shocks that dynamically shape both domains using data from World Development Indicators for the period 1990-2021. Employing a comprehensive analytical framework, the study investigates how advancements in ICT, an index of computers, mobile phones and internet, influence poverty rates, proxied by head count ratio, in the short run and long run and, conversely, how the socio-economic conditions associated with poverty feedback into the ICT landscape. Correlation test, granger causality test, co-integration test and VAR/VECM models were utilised in an endeavor to seek answers to the questions. The empirical results showed that there is a relationship, with ICT truly causing poverty in South Africa. The VAR/VECM established that there exists a long run relationship between ICT and poverty in South Africa, at 10% significance level, and the variance decomposition further confirmed some significant short run feedback shocks between ICT and poverty. It is highly recommended that the South African government put in place sound and friendly ICT policies, more especially to the marginalised and poor townships where a lot of SMMEs are trying to thrive. Skills development and an increase in public expenditure on ICT is recommended, as an effort to eradicate poverty through ICT. Through empirical analysis, the complex dynamics that underscore this mutual feedback loop were exposed, shedding light on the potential mechanisms for breaking the cycle of poverty through strategic ICT interventions. This research not only contributes to the academic discourse on technology and development but also provides practical insights for policymakers and stakeholders seeking sustainable strategies to address poverty challenges in South Africa

THE INTERACTION BETWEE THE EFFECTIVENESS OF FINANCIAL INSTITUTIONS AND THE FLOW OF FOREIGN INVESTMENT: AN INTEGRATIVE ANALYSIS IN THE ALGERIAN ECONOMY 2000-2023

This study aims to analyse the relationship between the effectiveness of financial institutions and foreign investment flows in light of time-series data. The results showed that the financial institutions effectiveness index remained relatively stable during the studied period, while the foreign investment flow index experienced noticeable fluctuations. Using unit root and cointegration tests, it was found that the two time series, FIEI and DFI, are stationary at level (I(0)) and do not suffer from unit root problems. Furthermore, the results of the bounds test showed the existence of cointegration between the two indices at 1%, 5% and 10% significance levels. Through the standard model, it was found that the FIEI (-1) index has a positive and statistically significant impact on foreign investment flow, while the FDI index did not show a significant effect. The equilibrium correction rate (ECT) was found to be 41.79%, indicating a continuous correction of the gap between actual and balanced values

THE EFFECTS OF SOUTH AFRICA’S MACROECONOMIC FACTORS ON YOUTH ENTREPRENEURSHIP

This study investigates the effects of South Africa’s macroeconomic factors on youth entrepreneurship using the Auto-Regressive Distributed Lag (ARDL) model, with quarterly data spanning from 2008Q1 to 2022Q4. The analysis reveals that macroeconomic variables, including GDP, human capital, interest rates, gross fixed capital formation, and youth unemployment influence youth entrepreneurship in both short and long runs. Notably, human capital and interest rates show significant relationships with education fostering entrepreneurship, while high interest rates constrain it. Although GDP and unemployment have positive associations with entrepreneurship, their effects are not statistically significant. The findings highlight the need for policies that prioritise youth entrepreneurship through improved education, supportive infrastructure, and alternative financing mechanisms. Such interventions could enhance youth-led entrepreneurial activities, mitigate unemployment, and promote sustainable economic growth. The study underscores the importance of targeted macroeconomic strategies to empower South African youth entrepreneurs and addresses gaps in existing literature on the economic determinants of entrepreneurship

DRIVERS OF NATURAL GAS PRICES IN EUROPEAN UNION

Natural gas is a key source of energy and an important industrial input in electricity generation. The three gas directives from the beginning of the 21st century liberalised the European gas market. They incentivised a switch from Oil Price Indexing to a Gas-on-Gas price-setting mechanism, which made the deregulated market an interesting object of research. The drivers of natural gas prices in the European market are examinee. A VAR model with exogenous variable (VARX) is used to estimate the effects of chosen factors. The impulse-response function shows that in the short run, the European gas market is sensitive to imports of liquid natural gas and gas storage, whereas in the long run, it is highly dependent on coal, with air temperature and oil prices playing a negligible role. Forecast error variance decomposition results indicate the relationship between natural gas and coal prices in Europe. Cumulatively, approximately 64% of natural gas price variation is explained by variations in coal prices, gas storage and liquid natural gas imports, with coal prices being the single most important driver of natural gas prices, contributing to 35% of price variation

FACTOR ANALYSIS OF THE TOURISM SECTOR IN THE ADRIATIC-IONIAN INITIATIVE COUNTRIES

Tourism represents a key segment of economic development in the countries of the Adriatic-Ionian Initiative (AII), contributing to the gross domestic product (GDP) and influencing employment, investments, and the trade balance of the region. This analysis examines the trends of tourism creation and diversion in eight AII countries-Albania, Bosnia and Herzegovina, Croatia, Greece, Italy, Montenegro, Serbia, and Slovenia-over the period from 1995 to 2024.This paper employs a multivariate approach to identify key factors that shape the competitiveness of destinations and contribute to the stability of the tourism sector. The study considers the impact of infrastructure investments, political stability, macroeconomic indicators, government policies on tourism subsidies, as well as the effects of pandemics and global economic crises on tourism flows. The results indicate that Croatia, Greece, and Montenegro are the leaders in the tourism industry, with tourism accounting for more than 10% of GDP. Albania and Slovenia show stable growth, whereas Italy, despite being an economic powerhouse, has a lower tourism share compared to its industrial and technological sectors. Bosnia and Herzegovina and Serbia face challenges in attracting foreign tourists due to infrastructural constraints and insufficient promotion. The study’s conclusions emphasize the importance of sustainable tourism development strategies, increased investments, and regional cooperation to mitigate the effects of seasonality and enhance the sector’s resilience to global economic changes

PUBLIC MEETS PRIVATE: UNRAVELING THE DYNAMICS OF INFRASTRUCTURE INVESTMENT IN SOUTH AFRICA

Private investment plays a pivotal role in job creation and economic growth. Given its importance, this study scrutinised the dynamics of how public investment, particularly in critical infrastructures, either complements or competes with private investment. The study delved into the intricate relationship between private investment and government-led investment in critical infrastructure in health and electricity generation in South Africa. Quarterly time series data from 2006Q2 to 2023Q2 were used while adopting the autoregressive distributed lag (ARDL) technique. According to the econometric analysis, government spending in health and electricity generation complements private investment. The effects of the investment in the critical infrastructure variables on the ratio of private investment to GDP are quite low, although highly statistically significant. The findings underscore the importance of well-targeted infrastructure investments in driving private-sector development. Overall, this comprehensive analysis contributes to understanding the complex dynamics between public and private investments in the context of critical infrastructure development in South Africa. The findings of this study are essential for policymakers, investors and researchers seeking to enhance the effectiveness of economic policies and foster sustainable economic development in the country

IS DIGITALISATION A CATALYST FOR BRICS COUNTRIES’ EXPORTS? AN EMPIRICAL ANALYSIS

Digitalisation is a key catalyst which transforms international trade by enhancing efficiency, reducing costs, expanding market access and unlocking new opportunities, significantly boosting export performance. Understanding this interplay is essential for Brazil, Russia, India, China and South Africa (BRICS) countries, major players in global trade. This study examines the digitalisation-exports relationship in BRICS, specifically how Information and Communication Technology (ICT) catalyses exports. Using a combination of panel and country-specific autoregressive distributed lag (ARDL) models, this method captures country heterogeneity and both short-term and long-term dynamics. Panel autoregressive distributed lag identifies common BRICS trends, while country-specific autoregressive distributed lag highlights distinctive country effects, strengthening the analysis. Results show that, in the short term, Information and Communication Technology’s effect on exports varies across models. However, in the long term, Information and Communication Technology consistently exerts a statistically significant effect. Findings emphasise digitalisation’s pivotal role in enhancing BRICS exports, particularly long term. Yet, effectiveness differs across countries. Disparities in digital infrastructure, digital literacy and institutional quality suggest digitalisation alone is insufficient. Addressing these challenges enables BRICS to leverage digitalisation and strengthen their position as prominent emerging export countries. This study contributes to the digital economy discourse with empirical evidence-based policy implications

EFFECTS OF VALUE ADDED TAX INCREASE ON HOUSEHOLDS’ WELFARE IN SOUTH AFRICA

The South Africa’s Value Added Tax increased from 14% to 15% on the 1st of April 2018 because of the compelling need to avoid budget deficits. Value Added Tax increment always leads to consumer price increase with some adverse impacts on consumers’ purchasing power. This study evaluated the welfare effects of commodity price changes after the Value Added Tax increase on South African families. The data were from the National Income Dynamics Survey 2018 and the South African Consumer Price Indexes (2017/18 and 2018/19). Price elasticities were obtained from the Quadratic Almost Ideal Demand System Model and the impact of commodity price fluctuations in terms of Compensating Variation were then calculated using price elasticities. The study’s conclusions provide an essential basis for an empirical examination to pinpoint the effects on welfare. The paper recommends that instead of having a uniform VAT standard rate, luxury goods should be subject to a higher VAT rate such as expensive watches, yachts and cars. Due to the large percentage of luxury goods being imported, domestic demand may not be negatively impacted, and the balance of payments may even slightly improve. Also, the study endorses that the list of items with a zero rating be expanded to include more products that the poor purchase more frequently, such as all types of bread, soaps, candles and items connected to education (such as school uniforms). Additionally, these findings are a part of a bigger investigation into quantitative evaluations of policy alternatives to guide the nation’s VAT reform

Risk Perceptions of Insurance Policyholders in the Gauteng Region of South Africa

The insurance industry’s product range is diverse, and the risk perception of each product differs from that of insurers, especially given the constantly changing market conditions. Often, insurance companies misunderstand the risk perceptions of their policyholders and inevitably lose clients. To better understand these perceptions of risk, this paper aims to analyze the endogenous factors that influence the perception of risk of insurance policyholders in Gauteng, South Africa. These endogenous factors include demographics, risk perception, risk tolerance, and behavioral finance biases. South African insurance policyholders residing in Gauteng province of South Africa were identified as the target population for this study. From this study, endogenous factors such as age, health status, representativeness, and availability bias, as well as self-control, were identified as significant factors influencing the risk perception of insurance policyholders. The risk tolerance profile of the sample indicated that most participants would take average financial risks as most assets were covered, but not comprehensively. Risk tolerance was also found to be a contributing factor to the risk perception of policy holders. By gaining deeper insights into insurance policyholder risk perceptions and the antecedents thereof, insurance companies could be better position to expand their horizons and provide higher quality insurance services to their clients