A policy for the jobless youth in South Africa

Amina Ebrahim and Jukka Pirttilä

Journal of Development Economics, 2025, vol. 172, issue C

Abstract: This paper uses survey and tax administrative data to analyse the effects of a sizeable employer-borne payroll tax credit for young, low-wage workers in South Africa. We find fairly limited impacts of the wage subsidy on the employment of young, low-wage workers relative to two comparison groups: slightly older, low-wage workers and slightly higher-paid, young workers. We find evidence of increases in low-wage youth entry into employment, but these are too small to affect overall employment. However, the female employment rate has increased, and unemployment among women has dropped because of the policy. We find evidence to suggest that the policy has led to a rise in earnings, particularly for men and those earning around the maximum subsidy value.

Keywords: Employment; Youth; Wage subsidy; South Africa (search for similar items in EconPapers)
JEL-codes: H25 H32 H40 J23 O12 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:172:y:2025:i:c:s0304387824001433

DOI: 10.1016/j.jdeveco.2024.103394

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