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Estimating the Effects of South Africa's Youth Employment Tax Incentive – An Update

Vimal Ranchhod and Arden Finn ()

No 152, SALDRU Working Papers from Southern Africa Labour and Development Research Unit, University of Cape Town

Abstract: Our previous study of the effects of South Africa's Employment Tax Incentive (ETI) (Ranchhod and Finn, 2014) found that the ETI did not have a statistically significant impact on youth employment probabilities in the first six months of 2014. In this update we extend the period of analysis from six months to all twelve months of 2014 and find that this does not alter our qualitative findings. These are that the ETI has not resulted in a statistically significant change in the probability of young people finding jobs, despite its cost of R2 billion over the first year of its existence. Furthermore, there is no evidence to suggest that the introduction of the ETI resulted in an increase in the level of churning for youth in the labour market.

Keywords: Youth; unemployment; South Africa; wage subsidy; employment tax incentive (search for similar items in EconPapers)
JEL-codes: H25 H32 J38 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-pbe and nep-pub
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