Acta Universitatis Danubius. Œconomica, Vol 15, No 3 (2019)

Is there hysteresis in South African unemployment? Evidence from the post-recessionary period

Vuyokazi Pikoko, Andrew Phiri


High unemployment in South Africa possess as the country’s most problematic economic issue faced by South African policymakers and hence is considered an overriding priority within the design of large scale government expenditure programmes. In this study, we investigate the hysteresis hypothesis for 8 categories of unemployment in South Africa using a battery of individual and panel unit root testing procedures applied to quarterly data collected in the post-recession period of 2008:q1 to 2017:q2. Indeed our empirical results confirm the hysteresis hypothesis for a majority of unemployment classifications with the exception of unemployment associated with persons aged 55 to 64 years old. Overall, our obtained empirical results hold far reaching ramifications towards domestic policymakers.


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