International Experience with Worker-side and Employer-side Wage and Employment Subsidies, and Job Search Assistance Programs: Implications for South Africa

by SMITH, C., 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

Smith summarises international experience with labour market interventions aimed to improve employment, particularly among disadvantaged job seekers. These interventions include firm-side wage and employment subsidies, worker-side wage and employment subsidies, and job search assistance programmes. The review then assesses which policies are particularly relevant to South Africa’s unique labour market situation. Because active support for unemployed individuals have become an instrument of choice, there are numerous policy examples from which South Africa can learn. Over the past few decades, a range of labour market policies targeted to poorer, less-skilled, unemployed workers has been introduced internationally under the heading of ‘active labour market policies’. Many countries have fundamentally altered the nature of their support for unemployed people or those out of the labour market, as active labour market policies were integrated with existing ‘passive’ support for the non-employed. The nature and effectiveness of these programmes vary significantly from country to country. Smith discusses the design and purpose of these programmes, and explore which ones have been most successful. He then assesses which programmes might be most beneficial for improving the labour market prospects of South Africa’s large unemployed population.