Analysing Intersectoral Outsourcing in South Africaby TREGENNA, F. , 2007
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council
Tregenna examines whether services employment growth in South Africa can be explained by outsourcing or alternatively expanded activity. To do this, Tregenna develops a new methodology for quantifying the extent that outsourcing contributes to shifts in employment between sectors. Using occupational and sectoral data from the October Household Surveys (1997–1999) and Labour Force Surveys (2000–2005), decomposition techniques are used to separate out changes in sectoral employment associated with changes in the size of particular occupations from a reallocation of jobs between sectors. A secondary decomposition analysis is used to separate out changes in sectoral employment into a component associated with changes in the share of an occupation within a sector and a component associated with changes in overall employment in the sector. Trends in employment in the business services subsector are also examined. The focus is on the manufacturing and private services sectors, and the general government sector is also examined. The results suggest that intersectoral outsourcing accounts for some but not the majority of the apparent shift in employment between the manufacturing and services sectors in South Africa.