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Why high open unemployment and small informal sector in South Africa?

By Geeta G, Hi Kingdon and John Knight


Unemployment in South Africa is so widespread that it demands an explanation. This paper examines why the unemployed do not enter the informal sector, as is common in other developing countries. The findings provide little support for the idea that unemployed people choose to be unemployed: the unemployed are substantially worse off, and less satisfied with their quality of life, than they would be if informally employed. Various impediments to entry into the informal sector appear to increase open unemployment. Acknowledgements This paper has benefited from the comments of Sam Bowles, Angus Deaton, Marce

Year: 2001
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