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Determinants of current job tenure in South Africa

Determinants of current job tenure in South Africa. Seble W orku Statistics South Africa. Second Congress of African Economists Abidjan, Cote d’Ivoire November 24-26 2011. Conceptual framework. Economic theory: Becker (1981)

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Determinants of current job tenure in South Africa

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  1. Determinants of current job tenure in South Africa Seble Worku Statistics South Africa Second Congress of African Economists Abidjan, Cote d’Ivoire November 24-26 2011

  2. Conceptual framework • Economic theory: Becker (1981) • inverse relationship between job mobility and investment in job-specific skills (experience and education) • the higher the job tenure, the more workers specialize in their field of training the higher becomes their earning potential in their job, and thus reduces the risk of job mobility • Empirical evidence: Gregg and Wadsworth (UK,1995 and 1998) Burgess and Rees (UK, 1996); Newmark et al (US,1999); Mumford and Smith (Australian and UK) 2002 • decrease in job tenure among Whites males who had previously had relatively long tenure • job tenure is shorter among non-Whites, female workers and amongst the lower paid • For SA, study determinant of tenure and mobility and potential causes and effects of socio-economic conditions • Use Labour Force Survey 2007

  3. Summary statistics

  4. Average duration of employment by population group Own computations based on LFS 2000-2007; QLFS 2008

  5. Average duration of employment by gender Source: Own computations based on LFS 2000-2007; QLFS 2008

  6. OLS estimates of determinants of job tenure

  7. Probit estimates of job change

  8. Probit estimates of job change (IV)

  9. Short tenure • Experience • Women • Higher educated • Received skills training • Labour market conditions (medical aid) • Proximity to urban area • Less mobility • Leaving in couple • Labour market conditions (pension, union membership) • Being in the informal sector • Being in domestic work • Controlling for regional unemployment • Regional effects much stronger • Similar directions except for the Western Cape • Controlling for endogeneity • Cetaris paribus, workers with pension or are union members are on average almost twice likely to stay on their job Findings

  10. Conclusion • As a worker accumulates experience, she would be more marketable • Frequent arrivals of job offers, would generate higher rate of mobility • Although unemployment rates have persistently remained high in South Africa, skilled workers have potentially higher rates of employment as compared to others • The effect of earnings are mixed. It seems as if workers will keep on changing their jobs until a certain earning threshold is reached beyond which mobility is less likely to occur • The informal and domestic sectors allow more flexibility and thus less mobility • Thus government should continue focusing on skills development • Labour market reforms need to include introduction of formal non-standard jobs characterised by job security and other benefits

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