The only long-term, sustainable solution to our youth unemployment crisis—deep economic regeneration—remains frustratingly elusive for South Africa’s 17.5 million young people. While the latest QLFS figures suggest that youth employment has improved over the past year, we are yet to return to pre-Covid levels of employment, let alone see the levels of job-rich growth our economy needs. As our youth population grows faster than the jobs available, many data points are heading in the wrong direction: every second young South African aged 18-34 is Not in Education, Employment, or Training (NEET). Among African women under 35 who eventually get a job, the average age at which they get that first job has increased from 24 years to 25 years (QLFS 2014 and 2024). Furthermore, according to Harambee’s own data, job stability has decreased, with average job duration dropping from 10 months to 6 months after Covid-19, across public employment programmes, formal sector and self-employment. Self-generated hustles are even more precarious, with an average duration of only 3 months.

Against this backdrop, some argue that until we build the economy we want—an economy of plentiful, secure, accessible entry-level jobs—there’s little point to investing in work interventions. But a deeper look at the data shows that view is not only wrong, but dangerous for today’s youth. It leads to what Prof. Ariane de Lannoy refers to as waithood: “…an anthropological concept expressing that young people really want to move towards independent adulthood, but there is a stage where they simply get stuck. And this stuckness is not static sitting and waiting, there is a lot happening: young people are hustling to create a livelihood, or reconnecting to education or to the labour market or making decisions for themselves”. It is vital we keep young people moving, strategically and with support, within the economy we have—not letting them stagnate waiting for the economy we want.

Evidence suggests young people are working even harder for any chance to work: Since 2014, the number of youth actively searching for work has increased by 6 percentage points. Their energy is helping to drive increased zig-zagging within the economy. We see this reflected in SA Youth data: of 3.8M youth, only 10-15% stay employed and are sustainably employed, with 30-40% churning in and out of work, between public employment programmes, private sector and short term income earning opportunities. This is corroborated by QLFS: though 6 million young people are ‘currently working’, a total of 8 million are moving in and out of employment in the short to medium term—see chart.

In the absence of enough stable, long-term employment to go round, this zig-zagging and circulation is a good thing. We know from our experience that getting work experience early can positively impact income mobility, whilst delays have the opposite impact. Working also provides essential non-income related benefits, such as improved mental health and providing structure to people’s lives.¹ Every part of the economy has a role to play, acting as a stepping stone, signpost or safety harness at different times in a young person’s journey.

The formal sector is the “top layer” of our employment mix: the source of stable, well-paying work that keeps young people motivated to build their employability. Transitions into the formal sector from other work opportunities are associated with income mobility. They tend to pay better and have a longer duration than other work opportunities. Our research has shown that if a young person has been employed for a year, the probability of them having a job in 1 years’ time is double that of someone who has worked for only 30 days. But the vast majority of entry level contracts are for fixed, short durations as employers are using structured programmes (learnerships, Youth Employment Service, fixed term contracts) as an entry-level recruitment strategy. So in the formal economy, our mandate is to ensure that these roles are accessible to as many young people as possible, and set up to give them the best chance of success – vs. it being a lottery ticket to a lucky few.

Public employment programmes are the next layer, and in South Africa, it is a vital one. In most upper-middle-income countries (UMIC) with small formal sectors, the informal economy is large, diverse and offers decent earning potential. That is not the case here.² Without a well-developed informal sector, government-funded public works programmes offer young people essential, first-time work and income generation opportunities, and keep them engaged in the labour force.³  The work itself is valuable: research points .⁴to the impact of productivity gains in these government-funded short term opportunities. Our data shows that these programmes, if well administered, address the most excluded – those who would not have found work, even if growth had been job-rich.

The informal economy is sometimes the only gateway to work for young people who are geographically cut off from other opportunities. It acts as an important fall-back or income bridge for those yet to land a formal sector or public works contract, or coming to the end of one. And, with increasing digitisation of the economy, it can open doors to real entrepreneurship.

In the absence of an economy that grows, we can create an economy that moves. By increasing upward momentum between these layers, we can make sure the vast majority of youth will work at least once before the age of 30. Momentum will come from:

1. Improving access to the jobs of today – i.e. prioritise inclusive hiring
2. Enabling short term work experiences to be more effective and available to young people.
3. Making opportunities visible and accessible, improving transitions between them through pathway management (what SA Youth sets out to do)

For each of these levers, our insights can help direct why, where and how to invest.

KEY INSIGHTS FOR
THIS QUARTER

1 Knabe, A., Schob, R., Weimann, J. (2017). The subjective well-being of workfare participants: insights from a day reconstruction survey. Applied Economics. 49(13): 1131-1325.
2 World Bank (2023). Supporting informal employment in South Africa. November. [Powerpoint Presentation]
3 Motala, S., Mncanga, B., Ngandu, S., Chetty, K., Harvey, J. (2024). A Study to Evaluate the Effectiveness of National Policies aimed at Facilitating the entry of young people into good quality employment. [Powerpoint Presentation].
4 Philip, K., Kie-Song, L., Tsukamoto, M., Overbeck, A. (2019). Employment Matters too much to society to leave it alone: The role of Public Employment Programmes as part of a Social Contract for the future of work. Presentation for 6th conference of the Regulating for Decent Work Network, ILO, Geneva.

2. Enable short term work experiences to be more effective and available to young people.

Our insight: Public employment and informal work are vital bridges (and in many parts of South Africa, the only bridges) to work. Improvements to these programmes make them function better for work-seekers.

Decades of research has shown that income-earning work is important to societies, providing individuals with a means to contribute to society, support themselves and their families, build self-worth, networks and skills.⁷ In the absence of formal sector jobs, public employment programmes provide many of these benefits, particularly in rural areas which are often ‘jobs deserts’. In our sample of 164,625 young people with more than one work opportunity recorded, half had their second work opportunity in a public employment programme. Youth in rural areas are 4x more likely to engage in public employment programmes than in the formal sector, in comparison to youth in urban areas who are only 1.5x more likely to do so.

Our research has shown that public employment programmes provide income on par or just below minimum wage (around R4,000+ per month for full time work) to many youth who were not previously earning any income, with opportunities lasting an average of 6 months. The fixed earnings of public employment programmes provide earning certainty (albeit, over a short period of time), whereas other options young people turn to during waithood, such as self-employment, tend to have little to no certainty. 

We know that public employment programme participants who transition to the formal sector engage more heavily in certain industries relative to all youth in the sample. But overall, this experience tends to translate less often into formal sector roles than other experiences. While this likely reflects the geography of public employment programme participants, more work can be done to understand how to better support these youth to translate their experiences into other full-time work opportunities. One option to explore is whether reaching out to youth while they are engaged in a public employment programme, offering them individualised coaching support, connecting them to relevant services and ensuring that all their documents are up-to-date could help strengthen their employability going forward. Findings of the Basic Package of Support pilot phase indicate significant and positive shifts in young people’s well-being, orientation towards, and uptake of education, training and employment opportunities after just three personalised coaching sessions.

Self-employment opportunities tend to be less economically secure than formal sector work or public employment programmes. Transitioning to a self-employment opportunity (from the formal sector or a public employment programme) is associated with economic fragility: only 12% of young people in our sample who transitioned to a self-employment opportunity earned a monthly income, (as opposed to inconsistent piece work) and even fewer earned an income that was better than their first role. Even so, self-employment remains an important element of an economy that moves. Firstly, young people tell us it is a bridge until they can secure a role in the formal sector or a public employment programme. SA Youth data confirms this: if their first opportunity is in a public employment programme or the formal sector, a young person tends to move on within the sector. By contrast, three quarters of those in self-employment leave it for a work opportunity in one of the other two sectors.

But self-employment has a bigger role to play, too. A recent report on township economies estimates the potential market value to South Africa’s economy from its 500 major townships at ZAR 900 billion. This is potential that is largely unrealised: thanks to the proximity and spatial exclusion of townships from central business districts, most of their businesses remain small-scale and essentially survivalist, tending to circulate local resources rather than produce tradable goods and services that serve wider markets, create decent work opportunities, and generate higher incomes. 

Not all forms of self-employment are equally risky or unpredictable. Partner opportunities that provide the scaffolding of access to markets, base salaries and business mentorship yield more resilient and durable earnings. One such partner is GoBuddy, a green e-commerce delivery service operator. GoBuddy has registered 3,140 individuals on its platform, of which it estimates that 90% are from the SA Youth network. Our data suggests that salaries for these types of partner opportunities range between R3,000 – R5,000 per month with an average duration of 12 months. This is in comparison to the R700-900 earned and 4.9 month duration experienced with more survivalist self-employment activities. 

5 Based on SA Youth data, June 2024.
6 United Nations (n.d.) Young People’s Potential, the Key to Africa’s Sustainable Development. Retrieved here.
7 See Bhanot, S., Han, J., Jang, C. (2018). Workfare, wellbeing and consumption: Evidence from a field experiment with Kenya’s urban poor. Journal of Economic Behaviour and Organization. 149: 372-388; Knabe, A., Schob, R., Weimann, J. (2017). The subjective well-being of workfare participants: insights from a day reconstruction survey. Applied Economics. 49(13): 1131-1325; Philip, K., Kie-Song, L., Tsukamoto, M., Overbeck, A. (2019). Employment Matters too much to society to leave it alone: The role of Public Employment Programmes as part of a Social Contract for the future of work. Presentation for 6th conference of the Regulating for Decent Work Network, ILO, Geneva.