Bell, Trevor : Unemployment in South Africa

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Real Intwraat Rats and Rats of Increaee in Non-Aqricultural Employment 1952-1963 Real Intereat Bate Increase In Son- Agricultural Employment 1953 1 .OO 0.41 1954 2.60 4,70 1955 1.30 3,79 1956 3.59 - 0,49 1957 1.85 0.72 1958 1.65 2.28 1959 3.10 3.75 1960 3.79 0,32 1961 3.77 1,48 1962 4,19 ?,i? 1963 3.35 3,82 1964 2.27 8,87 1965 1.60 7,qfl 1966 2.55 3,33 1967 3.10 2.64 1968 4.40 1,45 1969 3.30 3,Y3 1970 2.95 4,37 1971 2,78 3.07 1972 1,85 - !I.?> 1973 1.57 :3,;j 1974 - 2.74 F,R3 1975 - 3.79 5.96 1976 0.82 :,;I 1977 - 0,24 -. ;,?'I 1978 0.29 .- 2,:\3 1979 3.41 2.21 1980 4.10 3.82 1981 - 2.64 I,hO 1982 - 0.51 - 0.33 1983 - 0.26 - 3,bb Somrc.ml (1) RDliMl inters.+ rates (Government Band Yield,: Intornational Mnstary Pund, Internatronal - Finenclal SUtietice, Yssrbmk 1982 and March 1984. cerest (2) Cons-r price indi4am: South African Reservc aank, W u l y Bulletilcaxb6aue issuee. 13) Increase in non-agricultural employment: south African SUtistic~ 1982, p. 7.4 for yeare 1952-1981; Quarterly Bulletin of Statimtice for 1982 and 1983. - IIOCml mm rul intmr*at rate ia th. nominal government bond yield less th. imYY in th. consmer price index for each year.
however, primarily reflects a reduction in the rate of qrowth of the general scale of the economy rather than a substitution of capital for labour. Indeed, comparing these two five year periods, the decline in the employment growth rate was associated with a falling rate of growth of both output and capital stock in nanufacturing industry. The rate of grath of the fixed capital stock fell by 3.26 percentage points whereas the rate of increase of capital intensity, as measured by the capital/labour ratio (Kfi), increased by 1.55 percentage pints; and as measured by the capital/autput ratio (X/Y) it rose by only 0.65 percentage points. lhus wa find that our troubles stem from the fact that negative and real interest rates are associated with slw economic qrovth, and not prinuily with the substitution of capital for lamur due to factor market distortions1 ) In so far as K/Y and K/L did rise it cannot be assumed that this was entirely due to lower interest rates2). Partly they would have tended to rise simply because of the emergence of a good deal of excess productive capacity in the protracted recession frm 1975 on3). Partly too it may have been due to a shift of investment resources into highly capital-intensive energy products such am the expansion of SASOL's output capacity, that is to intersectoral shifts in the distribution of investment rather than to chanqes in production methods within sectors. And to some extent, too, the rising rates of increase of K/Y and Kfi might have been completely 1) Davenport (1982) finds that the rise in the Canadian unemployment rate between 1973 and 1981 was "entirely due to the slovdom in the growth of output capacity", but as a measure of capital-intensity he focusses only on K/Y and does not indicate to what extent Kfi increased. 2) It is notevorthy that most of the increase in the growth rate of KfL occurred between 1965 and 1970, and it rose comparatively slowly thereafter when interest rates were at their lwest. 3) See Davenpart (1982)
Page 2 and 3: INSllIUTt TOR SOCIAL AND ECONOMIC R
Page 4 and 5: i CONTENTS Page - u.t of Tabla0 and
Page 6 and 7: Preface This paper is an extension
Page 8 and 9: Applications by whltea for Employme
Page 10 and 11: Simkins. His work is noteworthy par
Page 12 and 13: There is not, to my knowledge, anot
Page 14 and 15: The evidence thus suggests a persis
Page 16 and 17: ~i~~~~ 1: UNEMPLOYMENT PATES: UNITE
Page 18 and 19: Table 5: Unemployment Rates in Scnn
Page 20 and 21: Thue in a number of other countries
Page 22: Table 6 Registered Unemployment Rat
Page 25 and 26: Table 7 Non-Agricultural Employment
Page 28 and 29: In the case of Blacks, employment g
Page 30 and 31: governwant intervention in foreign
Page 34 and 35: Table 9 Real Interest Rates and Ave
Page 36 and 37: grawth in general rather than to an
Page 38 and 39: hetbr th. unemployment in voluntary
Page 40 and 41: it is argued that for a small open
Page 42 and 43: imzlO.ion of this form of voluntary
Page 44 and 45: significance1). However, the findin
Page 46 and 47: Thus where the unemployment rate sh
Page 48 and 49: have expected a substantial increas
Page 50 and 51: vii) Finally, amongst the causes of
Page 52 and 53: traditionally been considerably hig
Page 54 and 55: already become much more difficult
Page 56 and 57: unemployment is deregulated markets
Page 58 and 59: 'thirties and even the postvar peri
Page 60: might, JB (1982) "The Nature of Une

Bell, Trevor : Unemployment in South Africa

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