Young graduates: Unemployment indicators Q1 report

71point4 > Blog archive > 2020 > March > 24 > Young graduates: Unemployment indicators Q1 report
71point4 > Blog archive > 2020 > March > 24 > Young graduates: Unemployment indicators Q1 report

Young graduates: Unemployment indicators Q1 report

Posted by: Claire Hayworth
Category: Education, Youth employment
71point4 is working with SAGEA to release a quarterly newsletter that tracks graduate unemployment in South Africa. This quarterly report focuses on young graduates, defined as people under the age of 35 who have a Bachelors degree or higher. According to the latest Quarterly Labour Force Survey, in the fourth quarter of 2019 there were 645,000 young graduates in South Africa, of which 565,000 were in the workforce (i.e. excluding not economically active and discouraged workers).

In 2019 the young graduate unemployment rate reached an all time high of 15.7%

While this is significantly lower than the national unemployment rate of 29%, the young graduate unemployment rate has grown more rapidly than in other education cohorts (e.g. individuals with only a diploma, matric, or less than matric). Between 2008 and 2019 the young graduate unemployment rate doubled.

The increase in the unemployment rate can be attributed to South Africa’s weak growth performance coupled with a growing workforce

Over the last five years GDP has grown by just 3.4%. Over the same period South Africa’s workforce grew by 9%. The young graduate workforce grew even faster at 15% over the period. This means that over the past five years the economy’s ability to generate employment and absorb workers has remained relatively stagnant, at the same time the number of young graduates in the workforce grew by 130,000.
Demand and supply

A consequence of the increasing unemployment rate is that the pool of unemployed young graduates is becoming saturated with inexperienced workers

Over the past five years the number of unemployed young graduates who have never worked before almost doubled to over 50,000. Over the same time period the number of unemployed graduates who have worked before but have been unemployed for over a year more than doubled. This leaves a pool of inexperienced young graduates with a steady erosion of skills among those who have had some work experience.

The burden of unemployment is mostly borne by previously disadvantaged graduates

Previously disadvantaged graduates make up 60% of the young graduate workforce, however they make up almost 90% of unemployed young graduates. When we consider only those unemployed young graduates who have never worked before, the proportion of graduates who are previously disadvantaged increases to over 90%.

Graduate composition

Young previously disadvantaged female graduates are the most likely segment to be unemployed; according to the Quarterly Labour Force data, 23% of young previously disadvantaged female graduates are unemployed, compared to 21% for young previously disadvantaged male graduates and 5% for young white graduates.

Methodology note

A major limitation of the QLFS is the sample sizes. While each survey comprises a sample of around 37,000 working age individuals (aged between 15 and 64 years), there are relatively few survey respondents who are graduates, fewer who are young and fewer still who are unemployed. To overcome this sample size limitation, we have pooled the data across quarters to generate a larger sample. For example, 2019 figures are based on a pooled sample of 2019 Q1, Q2, Q3 and Q4. Our analysis therefore reports annual statistics, derived as the average of all surveys administered within a given year.
Analysis and newsletter compiled by: Claire Hayworth & Chris Garbers
Author: Claire Hayworth

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