Review of Labour Markets in South Africa: Low-waged and informal employment in South Africa

by VALODIA, I., LEBANI, L., SKINNER, C. , 2005
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

Low-wage employment and informal employment are two important considerations for labour market policy in South Africa. In addition to the high levels of low-wage income in labour market, the country has not been shielded from the rapid growth in informal employment across the globe. Understanding trends in and patterns of informal employment is critical for broader labour market policy. This paper is part of a larger project of the Human Sciences Research Council to assess the state of knowledge of the labour market in South Africa. It outlines the extent of low-wage employment in the country and reviews the literature on informal employment, one important component of low-wage employment. Valodia begins by providing a statistical overview of trends in low-wage employment, using the Labour Force Surveys of March 2000 and March 2004. He then discusses the literature on informal employment, applies it to the South African context, and reviews trends in informal employment. Using a unique panel drawn from the Labour Force Survey, the paper analyses linkages between informal employment and other labour market statuses, including unemployment.