2.3 Why are we not realising the demographic dividend? “Although statistically South Africa is in a position to cash in on a demographic dividend, the challenges of joblessness and HIV/AIDS are a burden on those who are working. If not managed, the perfect window could become the perfect storm.” Source: South African National Planning Commission (NPC), 2012
As described in Box 1, one of the necessary conditions for realising the demographic dividend is that there must be sufficient livelihood opportunities for the larger working-age population; this is essential to increase household and national incomes, and to further invest in the education of the (smaller) cohort of children. 2.3.1 Unemployment Figure 6 shows that South Africa’s unemployment rate has remained stubbornly high for decades17,28–31 and, due to weak economic growth,32 the economy has struggled to create enough jobs to absorb the number of young people entering the labour market every year. This graph also shows that people with lower skills find it more challenging to find work than their higher-skilled peers; the unemployment rate for those with only basic education is 35.5% compared to those with advanced education at 14.7%. However, South Africa’s unemployment rate overall has been trending upward since 2008, and more recent estimates for the fourth quarter of 2021 place it at 35.3%.33 This translates to 7.9 million people under the official definition of unemployment, but according to the expanded definition, 12.5 million South Africans of working age (46.6%) are unemployed.33
Figure 6: South African unemployment rates, 1991-2021
Between 2007 and 2019, the working-age population increased by 6.5 million 4, while the number of people employed increased by just under 2 million.34 Source: The World Bank, 2021 & 2022
4
T his number is calculated by subtracting the total number of people who left the working-age cohort (those aged 65 or older) between 2007 and 2019 from the total number of people who entered the working-age cohort (those aged 15 to 64).
11
INEQUALITY AND DEMOGRAPHY
