Achieving Higher Growth and Employment: Policy options for South Africa

Using a dynamic computable general equilibrium model, the paper provides some direction on the areas of policy reform that could generate strong growth, employment and poverty reduction in South Africa. The core requirements for more rapid and sustained growth are greater saving, investment, more productive use of capital by better skilled workers, reduction in the skill constraint and moderation in unit labour costs. Higher labour productivity growth will in its own right increase the labour intensity of the economy as a whole. We estimate that the combined impact of reducing transport and communication costs, reducing the skill constraint, and increasing foreign direct and domestic investment can increase potential growth to close to 8 per cent and create an additional 1.7 million jobs beyond the number that would be created without policy adjustments. The policy adjustments contemplated in this paper seek to enable greater diversification of production techniques and types of businesses thereby helping to achieve a full utilisation of labour across skills competencies.

Working paper 334
1 March 2013

Related South Africa’s Cities and Growth Spatial Challenges and Policy Interventions Content

Request for Proposals: The role of cities as drivers of growth and employment
Background Urbanization in South Africa is expected to reach 80% by...
Call for Work
South Africa’s future will be decided in our cities
Discussion Document 14 South Africa’s cities face multiple, overlap...
Dieter von Fintel, Justin Visagie, Ivan Turok, Takwanisa Machemedze, Claus Rabe, Sebastian Galiani, Edward Glaeser
Discussion Document
Monitoring South Africa’s metropolitan economies: A survey of the data landscape
Discussion Document 13 Disparities in data across different metropo...
Dieter von Fintel
Discussion Document
Cities, productivity and Jobs in SA: Problems and potential
Discussion Document 12 Cities contribute to national prosperity bec...
Ivan Turok, Justin Visagie
Discussion Document
Place-based economic policies: international lessons for South Africa
Discussion Document 11 Place-based policies are designed to support...
Harris Selod, Claus Rabe
Discussion Document
What luminosity data can and cannot reveal about South Africa’s urban economies
Discussion Document 10 As novel types of data are becoming availabl...
Takwanisa Machemedze
Discussion Document
Crime: A policy-oriented survey
Discussion Document 9 South Africa has a reputation for having high...
Sebastian Galiani
Discussion Document
Virtual CDE Workshop on SA Cities and Growth
Urban economics has provided powerful insights into how the charact...

Search Resources

Ground Floor Brookside Building
11 Imam Haron Road
Claremont, 7700
Cape Town

PostNet Suite # 109
Private Bag X1005
Claremont 7735
Cape Town

Get Social