An analysis of challenges facing basic education in South Africa
- Njongi-Ndleleni, Nomthandazo
- Authors: Njongi-Ndleleni, Nomthandazo
- Date: 2013
- Subjects: Economic development -- Effect of education on -- South Africa , Education -- Economic aspects -- South Africa
- Language: English
- Type: Thesis , Masters , MA
- Identifier: http://hdl.handle.net/10948/4598 , vital:20620
- Description: The study seeks to analyse challenges facing Basic Education in South Africa. There is a major emphasis on the education of the South African people to become responsible, participatory and reflective citizens that contribute to an emerging democracy. However, the government of SA is faced with many challenges that hinder the South African people from becoming an educated nation. This is based on the assumption that education plays a major role in improving the economic status of the nation. The education in South Africa is categorized into sectors, primary, secondary and tertiary which are interlinked through a fine thread that determines the success of individuals. It has been established that a number of factors or problems hinder learners from receiving a good standard of education. These include: parents’ lack of participation in their children’s education and the weak functioning of School Governing Bodies (SGBs) especially in the area of finance and general administration of the school, poor infrastructure and shortage or non-delivery of textbooks. Good leadership in schools is also needed to make sure that teachers attend to their classes diligently and learners take the importance of education seriously. Government needs to ensure that teachers are trained accordingly and schools have adequate basic resources. The qualitative research method was used and no interviews and survey were made during this study. This research will discuss these factors that have been identified as causing the drop in the standard of education in South Africa. The research concludes with an attempt to make some recommendations to improve this situation.
- Full Text:
- Date Issued: 2013
- Authors: Njongi-Ndleleni, Nomthandazo
- Date: 2013
- Subjects: Economic development -- Effect of education on -- South Africa , Education -- Economic aspects -- South Africa
- Language: English
- Type: Thesis , Masters , MA
- Identifier: http://hdl.handle.net/10948/4598 , vital:20620
- Description: The study seeks to analyse challenges facing Basic Education in South Africa. There is a major emphasis on the education of the South African people to become responsible, participatory and reflective citizens that contribute to an emerging democracy. However, the government of SA is faced with many challenges that hinder the South African people from becoming an educated nation. This is based on the assumption that education plays a major role in improving the economic status of the nation. The education in South Africa is categorized into sectors, primary, secondary and tertiary which are interlinked through a fine thread that determines the success of individuals. It has been established that a number of factors or problems hinder learners from receiving a good standard of education. These include: parents’ lack of participation in their children’s education and the weak functioning of School Governing Bodies (SGBs) especially in the area of finance and general administration of the school, poor infrastructure and shortage or non-delivery of textbooks. Good leadership in schools is also needed to make sure that teachers attend to their classes diligently and learners take the importance of education seriously. Government needs to ensure that teachers are trained accordingly and schools have adequate basic resources. The qualitative research method was used and no interviews and survey were made during this study. This research will discuss these factors that have been identified as causing the drop in the standard of education in South Africa. The research concludes with an attempt to make some recommendations to improve this situation.
- Full Text:
- Date Issued: 2013
An empirical application of the Tobin’s Q theory in housing investments in South Africa
- Authors: Sitima, Innocent
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11474 , http://hdl.handle.net/10353/d1013581
- Description: This study examines the patterns in the housing investments in South Africa in an attempt to understand if the possibility of the Tobin Q can be used to interpret the patterns and trends in the South African residential investments. The study, in its quest to explore and expose this intermporal relationship, it makes use of the South African annual time series data from 1960- 2010. The data was computed in different economic and econometric analysis software for better and reliable output, depending on the different level econometric technique that is required and need to be captured by the study. The dynamic investment equation is estimated using general- to- specific ARDL approach to magnify this connection and trends. The study established that combined asset prices and the levels of residential investment affect the long run investment performance rather than the Tobin Q. In the short run the lagged values of the Q, Business investment and residential investments seemed to be influential driving forces of private investment in South Africa. Even if the capital reserves in South Africa seem to be healthy, there is always a dire call for policy to be geared in the direction of the accessibility of credit to guarantee a supplementary conducive investment climate.
- Full Text:
- Date Issued: 2013
- Authors: Sitima, Innocent
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11474 , http://hdl.handle.net/10353/d1013581
- Description: This study examines the patterns in the housing investments in South Africa in an attempt to understand if the possibility of the Tobin Q can be used to interpret the patterns and trends in the South African residential investments. The study, in its quest to explore and expose this intermporal relationship, it makes use of the South African annual time series data from 1960- 2010. The data was computed in different economic and econometric analysis software for better and reliable output, depending on the different level econometric technique that is required and need to be captured by the study. The dynamic investment equation is estimated using general- to- specific ARDL approach to magnify this connection and trends. The study established that combined asset prices and the levels of residential investment affect the long run investment performance rather than the Tobin Q. In the short run the lagged values of the Q, Business investment and residential investments seemed to be influential driving forces of private investment in South Africa. Even if the capital reserves in South Africa seem to be healthy, there is always a dire call for policy to be geared in the direction of the accessibility of credit to guarantee a supplementary conducive investment climate.
- Full Text:
- Date Issued: 2013
An exploratory study of female labour force participation in South Africa: 1995 - 2010
- Authors: Mahali, Lesala
- Date: 2013
- Subjects: Labor markets -- South Africa , Unemployment -- South Africa , Labor supply -- South Africa , Women -- Employment -- South Africa , Role conflict , Women employees -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11465 , http://hdl.handle.net/10353/d1007050 , Labor markets -- South Africa , Unemployment -- South Africa , Labor supply -- South Africa , Women -- Employment -- South Africa , Role conflict , Women employees -- South Africa
- Description: The role that women play in the economy of any society is a desirable goal for equity and efficiency considerations. Just as with the rest of the world, the South African women lagged behind their male counterparts within the economic empowerment space and in the formal labour force. However, the role of women has undergone some transformations with issues relating to employment opportunities, such that their labour force participation has risen considerably since 1994. The female labour force participation rate is still seen to be persistently lower compared to the male participation rate even in the second decade of democracy. The rate of women labour force participation is even lower than the average. On the other hand, the increases have also been coupled with the rising rate of unemployment among women. The objective of this study was to investigate the determinants of female labour force participation in the South African labour market. The study uses a regression analysis on a cross sectional panel data covering a period of 1995 to 2010. Unlike most popular beliefs, the findings of this study reveal that fertility though not statistically significant, positively influences labour force participation of women. Other variables that are statistically significant in explaining female labour force are HIV/AIDS, marital status, age, household income and education. Race was found to be insignificant in explaining female labour force participation in the South African labour force.
- Full Text:
- Date Issued: 2013
- Authors: Mahali, Lesala
- Date: 2013
- Subjects: Labor markets -- South Africa , Unemployment -- South Africa , Labor supply -- South Africa , Women -- Employment -- South Africa , Role conflict , Women employees -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11465 , http://hdl.handle.net/10353/d1007050 , Labor markets -- South Africa , Unemployment -- South Africa , Labor supply -- South Africa , Women -- Employment -- South Africa , Role conflict , Women employees -- South Africa
- Description: The role that women play in the economy of any society is a desirable goal for equity and efficiency considerations. Just as with the rest of the world, the South African women lagged behind their male counterparts within the economic empowerment space and in the formal labour force. However, the role of women has undergone some transformations with issues relating to employment opportunities, such that their labour force participation has risen considerably since 1994. The female labour force participation rate is still seen to be persistently lower compared to the male participation rate even in the second decade of democracy. The rate of women labour force participation is even lower than the average. On the other hand, the increases have also been coupled with the rising rate of unemployment among women. The objective of this study was to investigate the determinants of female labour force participation in the South African labour market. The study uses a regression analysis on a cross sectional panel data covering a period of 1995 to 2010. Unlike most popular beliefs, the findings of this study reveal that fertility though not statistically significant, positively influences labour force participation of women. Other variables that are statistically significant in explaining female labour force are HIV/AIDS, marital status, age, household income and education. Race was found to be insignificant in explaining female labour force participation in the South African labour force.
- Full Text:
- Date Issued: 2013
Analysis of official development assistance (ODA) in the Eastern Cape Province
- Sotondoshe, Tolbert Hlanganisile
- Authors: Sotondoshe, Tolbert Hlanganisile
- Date: 2013
- Subjects: Economic assistance -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9202 , http://hdl.handle.net/10948/d1020422
- Description: In this study Official Development Assistance (ODA) is defined as resource flows from international community in the form of grants, technical assistance, support and financial co-operation. Government is held partially responsible or accountable for the management of these resources but not accountable for utilization of direct support to NGOs and private sector. According to the National Treasury’s Official Development Assistance (ODA) 2010 Review Report, the Eastern Cape is the second largest recipient of ODA in relation to other provinces. The province of KwaZulu Natal, ranked number one, and the province of Limpopo was recorded as the third largest recipient of ODA. As such it is recorded that European Union is the greatest funder in the provincial government focusing in the areas of Health, Urban renewal and Local Economic Development source (National Treasury ODA 2010 Review Report). To date, no analysis has been done on ODA in the Eastern Cape. This study seeks to analyse Official Development Assistance in Eastern Cape with a view to identifying constraints and gaps that may be contributing towards the ineffectiveness of ODA in the Eastern Cape.
- Full Text:
- Date Issued: 2013
- Authors: Sotondoshe, Tolbert Hlanganisile
- Date: 2013
- Subjects: Economic assistance -- South Africa -- Eastern Cape , Economic development -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9202 , http://hdl.handle.net/10948/d1020422
- Description: In this study Official Development Assistance (ODA) is defined as resource flows from international community in the form of grants, technical assistance, support and financial co-operation. Government is held partially responsible or accountable for the management of these resources but not accountable for utilization of direct support to NGOs and private sector. According to the National Treasury’s Official Development Assistance (ODA) 2010 Review Report, the Eastern Cape is the second largest recipient of ODA in relation to other provinces. The province of KwaZulu Natal, ranked number one, and the province of Limpopo was recorded as the third largest recipient of ODA. As such it is recorded that European Union is the greatest funder in the provincial government focusing in the areas of Health, Urban renewal and Local Economic Development source (National Treasury ODA 2010 Review Report). To date, no analysis has been done on ODA in the Eastern Cape. This study seeks to analyse Official Development Assistance in Eastern Cape with a view to identifying constraints and gaps that may be contributing towards the ineffectiveness of ODA in the Eastern Cape.
- Full Text:
- Date Issued: 2013
Impact of oil price on tourism in South Africa: an error correction model (ECM) analysis
- Authors: Gqozo, Pamela
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11486 , http://hdl.handle.net/10353/d1017941
- Description: The study focuses on the impact of oil price on tourism in South Africa. Quarterly time series data for the period 1990 to 2012 was used in this study. Error correction model is the research instrument that was used to determine the impact of oil price on tourism in South Africa. The explanatory variables in this study are oil price, real exchange rates, gross domestic product, consumer price index and transport infrastructure investment. The results of the study revealed that oil price, consumer price index and real exchange rate have a negative long run relationship on tourism, while gross domestic product and transport infrastructure investment had a positive long run relationship on tourism. It was also shown that oil price is statistically significant relationship on tourism.
- Full Text:
- Date Issued: 2013
- Authors: Gqozo, Pamela
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11486 , http://hdl.handle.net/10353/d1017941
- Description: The study focuses on the impact of oil price on tourism in South Africa. Quarterly time series data for the period 1990 to 2012 was used in this study. Error correction model is the research instrument that was used to determine the impact of oil price on tourism in South Africa. The explanatory variables in this study are oil price, real exchange rates, gross domestic product, consumer price index and transport infrastructure investment. The results of the study revealed that oil price, consumer price index and real exchange rate have a negative long run relationship on tourism, while gross domestic product and transport infrastructure investment had a positive long run relationship on tourism. It was also shown that oil price is statistically significant relationship on tourism.
- Full Text:
- Date Issued: 2013
The impact of a budget deficit on transport infrastructure investment in South Africa
- Authors: Nanto, Aphiwe
- Date: 2013
- Subjects: Budget deficits -- South Africa , Infrastructure (Economics) -- South Africa , Transportation -- South Africa , Debts, Public -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11478 , http://hdl.handle.net/10353/d1015245 , Budget deficits -- South Africa , Infrastructure (Economics) -- South Africa , Transportation -- South Africa , Debts, Public -- South Africa
- Description: Persistent government budget deficits and government debt have become major concerns in both developed and developing countries. This study investigates the impact of a budget deficit on transport infrastructure investment in South Africa. Quarterly time series data, covering the period 1990q1- 2009q4, was used in this project. The study tests for stationarity using the Augmented Dickey- Fuller and Phillips Perron; it tests for cointegration using the Johansen (1991, 1995) methodology. A vector error correction model is used as an estimation technique. The results of this study show that a budget deficit has a negative impact on transport infrastructure investment in South Africa.
- Full Text:
- Date Issued: 2013
- Authors: Nanto, Aphiwe
- Date: 2013
- Subjects: Budget deficits -- South Africa , Infrastructure (Economics) -- South Africa , Transportation -- South Africa , Debts, Public -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11478 , http://hdl.handle.net/10353/d1015245 , Budget deficits -- South Africa , Infrastructure (Economics) -- South Africa , Transportation -- South Africa , Debts, Public -- South Africa
- Description: Persistent government budget deficits and government debt have become major concerns in both developed and developing countries. This study investigates the impact of a budget deficit on transport infrastructure investment in South Africa. Quarterly time series data, covering the period 1990q1- 2009q4, was used in this project. The study tests for stationarity using the Augmented Dickey- Fuller and Phillips Perron; it tests for cointegration using the Johansen (1991, 1995) methodology. A vector error correction model is used as an estimation technique. The results of this study show that a budget deficit has a negative impact on transport infrastructure investment in South Africa.
- Full Text:
- Date Issued: 2013
The impact of fatal road accidents on the South African economy (1997-2011)
- Authors: Siswana, Babalwa
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11475 , http://hdl.handle.net/10353/d1013591
- Description: The purpose of the study is to examine the impact of fatal road accidents on the South African economy. The study used quarterly time series data for the period 1997 to 2011. A Johansen cointegration and vector error correction model (VCEM) was used to determine the impact of fatal road accidents on the South African economy. The explanatory variables in this study are labour productivity, real interest rates, unemployment and real exchange rates. Results from this study revealed that fatal road accidents have negatively impacted on the economic growth in South Africa while labour productivity, real interest rates, unemployment and real exchange rates have a positive long-run impact on economic growth in South Africa. This study recommends that road safety measures must be intensified in South Africa in order to maximize the benefits of economic growth. Keywords: Economic growth, fatal road accidents, South Africa
- Full Text:
- Date Issued: 2013
- Authors: Siswana, Babalwa
- Date: 2013
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11475 , http://hdl.handle.net/10353/d1013591
- Description: The purpose of the study is to examine the impact of fatal road accidents on the South African economy. The study used quarterly time series data for the period 1997 to 2011. A Johansen cointegration and vector error correction model (VCEM) was used to determine the impact of fatal road accidents on the South African economy. The explanatory variables in this study are labour productivity, real interest rates, unemployment and real exchange rates. Results from this study revealed that fatal road accidents have negatively impacted on the economic growth in South Africa while labour productivity, real interest rates, unemployment and real exchange rates have a positive long-run impact on economic growth in South Africa. This study recommends that road safety measures must be intensified in South Africa in order to maximize the benefits of economic growth. Keywords: Economic growth, fatal road accidents, South Africa
- Full Text:
- Date Issued: 2013
The impact of foreign debt on economic growth in South Africa
- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
- Full Text:
- Date Issued: 2013
- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
- Full Text:
- Date Issued: 2013
The impact of local economic development on economic sustainability of Buffalo City Metro Municipality
- Authors: Mahlanza, Zanele
- Date: 2013
- Subjects: Economic development , Local government -- South Africa -- East London , Sustainable development -- South Africa -- East London
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9172 , http://hdl.handle.net/10948/d1020110
- Description: The national framework of local economic development (LED) in South Africa (2006 – 2011) has the goal to support the growth of sustainable local economies through integrated government action. Municipalities as custodians of integrated development programs and local economic development strategies work with different stakeholders such as private industry, other government departments, non-government organizations and relevant community sectors in attaining envisioned developmental goals; thus are avoiding wasteful duplication of effort and resources. LED in the context of this study is defined as development of infrastructure within the BCMM for sustainability of small medium and micro enterprises in alleviating poverty in the area. This report presents an evaluation of the impact of local economic development in terms of basic infrastructure availability on the sustainability of small medium and micro enterprise development in the Buffalo City Metro Municipality (BCMM). This refers to amongst others accessibility of electricity and telecommunication in the operations of a business. The overall approach followed by the researcher throughout this research is the mixed methods or pragmatic approach. The research method followed is that one of a descriptive approach. The results of this study indicate that local economic development is still a new notion which is still unclear. There is evidence that there is a lack of basic services in some areas in the Buffalo City Metropolitan Municipal, this including access to electricity. The respondents also saw the local municipality as not doing much in support of new and small business and creating job opportunities for them. The study recommends that factors such as skills development, accessibility to basic service, development and promotion of SMMEs, are also major contributors to the effective impact of LED in BCMM.
- Full Text:
- Date Issued: 2013
- Authors: Mahlanza, Zanele
- Date: 2013
- Subjects: Economic development , Local government -- South Africa -- East London , Sustainable development -- South Africa -- East London
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9172 , http://hdl.handle.net/10948/d1020110
- Description: The national framework of local economic development (LED) in South Africa (2006 – 2011) has the goal to support the growth of sustainable local economies through integrated government action. Municipalities as custodians of integrated development programs and local economic development strategies work with different stakeholders such as private industry, other government departments, non-government organizations and relevant community sectors in attaining envisioned developmental goals; thus are avoiding wasteful duplication of effort and resources. LED in the context of this study is defined as development of infrastructure within the BCMM for sustainability of small medium and micro enterprises in alleviating poverty in the area. This report presents an evaluation of the impact of local economic development in terms of basic infrastructure availability on the sustainability of small medium and micro enterprise development in the Buffalo City Metro Municipality (BCMM). This refers to amongst others accessibility of electricity and telecommunication in the operations of a business. The overall approach followed by the researcher throughout this research is the mixed methods or pragmatic approach. The research method followed is that one of a descriptive approach. The results of this study indicate that local economic development is still a new notion which is still unclear. There is evidence that there is a lack of basic services in some areas in the Buffalo City Metropolitan Municipal, this including access to electricity. The respondents also saw the local municipality as not doing much in support of new and small business and creating job opportunities for them. The study recommends that factors such as skills development, accessibility to basic service, development and promotion of SMMEs, are also major contributors to the effective impact of LED in BCMM.
- Full Text:
- Date Issued: 2013
The impact of the exchange rate volatility on unemployment in South Africa
- Nyahokwe, Olivia https://orcid.org/0000-0003-2903-1014
- Authors: Nyahokwe, Olivia https://orcid.org/0000-0003-2903-1014
- Date: 2013
- Subjects: Foreign exchange rates -- South Africa , Unemployment -- South Africa
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/25580 , vital:64336
- Description: Real exchange rate volatility have important effects on production, employment and trade, so it is crucial to understand its impact on unemployment especially on a country like South Africa.This study analyses the impact of the real exchange rate volatility on unemployment and the dynamic adjustment of unemployment rate following shocks to its determinants using quarterly South African data covering the period 2000 to 2010. It begins with a review of literature on the impact of exchange rate volatility on unemployment and provides a brief updated background on the exchange rate and unemployment in South Africa. An empirical model linking the real exchange rate to unemployment is then specified. In contrast to previous analyses, this study augments the cointegration and vector autoregression (VAR) and the GARCH model including analysis with impulse response and variance decomposition analyses to provide robust long run effects and short run dynamic effects on the unemployment rate. The empirical analysis using a variety of specifications,estimation techniques, and robustness tests suggests that exchange rate volatility has a statistically and economically significant impact on employment. The variables that have been found to have a long run relationship with unemployment rate include the real exchange rate, exports ,real interest rate and the gross domestic product.The impulse response functions broadly corroborate the theoretical predictions, but only real interest rate and exports have a significant impact on unemployment in the short run. Results from the variance decompositions are largely similar to those from the impulse response analysis. The real exchange rate and exports are the only variables found to significantly explain the variation in the unemployment. The most interesting result that emerged from this analysis and is supported by previous research is that among other determinants, the real exchange rate explain the largest proportion of the variation in unemployment rate. On balance, the evidence therefore suggests that unemployment rate fluctuations are predominantly equilibrium responses to real exchange rate shocks in comparison with interest rates, economic growth and exports. , Thesis (MCom) -- Faculty of Management and Commerce, 2013
- Full Text:
- Date Issued: 2013
- Authors: Nyahokwe, Olivia https://orcid.org/0000-0003-2903-1014
- Date: 2013
- Subjects: Foreign exchange rates -- South Africa , Unemployment -- South Africa
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/25580 , vital:64336
- Description: Real exchange rate volatility have important effects on production, employment and trade, so it is crucial to understand its impact on unemployment especially on a country like South Africa.This study analyses the impact of the real exchange rate volatility on unemployment and the dynamic adjustment of unemployment rate following shocks to its determinants using quarterly South African data covering the period 2000 to 2010. It begins with a review of literature on the impact of exchange rate volatility on unemployment and provides a brief updated background on the exchange rate and unemployment in South Africa. An empirical model linking the real exchange rate to unemployment is then specified. In contrast to previous analyses, this study augments the cointegration and vector autoregression (VAR) and the GARCH model including analysis with impulse response and variance decomposition analyses to provide robust long run effects and short run dynamic effects on the unemployment rate. The empirical analysis using a variety of specifications,estimation techniques, and robustness tests suggests that exchange rate volatility has a statistically and economically significant impact on employment. The variables that have been found to have a long run relationship with unemployment rate include the real exchange rate, exports ,real interest rate and the gross domestic product.The impulse response functions broadly corroborate the theoretical predictions, but only real interest rate and exports have a significant impact on unemployment in the short run. Results from the variance decompositions are largely similar to those from the impulse response analysis. The real exchange rate and exports are the only variables found to significantly explain the variation in the unemployment. The most interesting result that emerged from this analysis and is supported by previous research is that among other determinants, the real exchange rate explain the largest proportion of the variation in unemployment rate. On balance, the evidence therefore suggests that unemployment rate fluctuations are predominantly equilibrium responses to real exchange rate shocks in comparison with interest rates, economic growth and exports. , Thesis (MCom) -- Faculty of Management and Commerce, 2013
- Full Text:
- Date Issued: 2013
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