Higher Education Key to Job Success in Struggling South African Market

New data from Stats SA highlights the crucial role of higher education in improving employment prospects in South Africa. The Labour Market Dynamics in South Africa 2021 report, published on Thursday (16 March), analyzes employment and job market trends in the country from 2016 to 2021. The report reveals the significant impact the Covid-19 pandemic had on the South African job market, with a net loss of over 1 million jobs and an unemployment rate soaring to 34.3%.

1. The South African job market remains strained, with the unemployment rate at 32.7% in Q4 2022, and higher education levels are crucial for improving employment prospects.
2. Between 2016 and 2021, the largest increase in unemployment was observed among those with matric education, while those with tertiary education experienced a lower increase in unemployment rates.
3. Youth employment prospects face significant challenges, with a decrease in the overall transition rate into employment and a higher percentage of unemployed youth lacking tertiary qualifications.

While the report only covers data up to 2021, recent information from the Quarterly Labour Force Survey for Q4 2022 shows that the unemployment rate is gradually improving, dropping to 32.7%. However, the South African job market is far from thriving, and many challenges remain. By the end of Q4 2022, a net gain of 154,000 jobs was recorded, but this figure pales in comparison to the 3.8 million increase in the adult working population from 2016 to 2022.

These statistics point to a strained job market, with significant increases in other population categories, including 2 million more people classified as unemployed, 1 million more discouraged, and over 660,000 more deemed not economically active.

The data reveals that South Africa’s job market continues to struggle, affecting citizens across race, gender, and education levels. However, the impact is more pronounced among those without higher education. Between 2016 and 2021, the unemployment rate rose by 7.6 percentage points, with the largest increase observed among those with only matric education level at 8.9 percentage points. In comparison, the increase in unemployment among those with tertiary education was 5.8 percentage points, while those without matric saw an 8.1 percentage point increase.

Stats SA emphasized the importance of education in the labor market, stating, “Those with higher levels of education stand a better chance in employment meaning people with tertiary education are more likely to be employed compared to people with matric and below matric education levels.” The absorption and labor force participation rates declined across all education categories during the period, but the data indicates that those with tertiary education have a higher likelihood of being absorbed into the labor market.

Youth employment prospects also face challenges. The overall transition rate into employment for youth decreased by 2.1 percentage points from 5.6% in 2016 to 3.5% in 2021, while the adult transition rate declined marginally from 6.8% to 6.7% during the same period. In 2021, about 46.0% of unemployed youth did not complete their matric, 43.2% did, and only 10.5% had a tertiary qualification.

The report underscores the vital role of education in securing and retaining employment. Among jobless individuals, either unemployed or inactive, those with tertiary education have a higher chance of moving from unemployment or inactivity into employment compared to those without matric. This data suggests that higher education is crucial for improving employment prospects in South Africa, particularly amid the ongoing challenges in the job market.