Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
A policy for the (jobless) youth: the employment tax incentive
The Employment Tax Incentive (ETI) is a first of its kind wage subsidy policy in South Africa. Designed to tackle the problem of youth unemployment, the ETI differs from previous policies as it aims to address unemployment through stimulating job creation. Youth unemployment has remained above 40 pe...
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Language: | English |
| Published: |
School of Economics
2021
|
| Subjects: | |
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867614437182013440 |
|---|---|
| access_status_str | Open Access |
| author | Ebrahim, Amina |
| author2 | Leibbrandt, Murray |
| author_browse | Ebrahim, Amina Leibbrandt, Murray |
| author_facet | Leibbrandt, Murray Ebrahim, Amina |
| author_sort | Ebrahim, Amina |
| collection | Thesis |
| description | The Employment Tax Incentive (ETI) is a first of its kind wage subsidy policy in South Africa. Designed to tackle the problem of youth unemployment, the ETI differs from previous policies as it aims to address unemployment through stimulating job creation. Youth unemployment has remained above 40 percent in the past ten years and is one of South Africa's key challenges. The policy was adopted in the face of this alarmingly high level of youth unemployment and at a time where the aggregate demand was low. This thesis is an important contribution to the academic literature on the demand for young workers by providing insights into this large active labour market policy intervention. The first substantive contribution is the preparation and development of a panel dataset based on payroll tax records. The tax data panel is then used to investigate the beneficiaries of the subsidy. Large firms in retail; manufacturing and financial services sectors are responsible for the highest number and largest value of subsidy claims. The subsidy is well targeted reaching younger workers in the eligible group. The subsidy is, however, only reaching half of all subsidy eligible workers. The second contribution is the investigation of job creation at the firm level. Using a matched difference-in-differences approach, a subset of ETI firms is found to have increased their employment of youth and these results are robust to various measures of youth employment. No evidence of displacement of ineligible workers if found. The third contribution explores the labour market outcomes of individuals eligible for the subsidy. Using both tax and survey data, I estimate the intention-to-treat impacts of the ETI using a triple differences method. There are very small positive effects on earnings and entry into employment and no evidence of change on overall employment and unemployment rates for young, low-wage workers. The thesis concludes by assessing the aggregate implications from these results for understanding youth unemployment in the South African labour market and the role of active labour market policy in overcoming this problem. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/33733 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:52:01.690Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2021 |
| publishDateRange | 2021 |
| publishDateSort | 2021 |
| publisher | School of Economics |
| publisherStr | School of Economics |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/33733 A policy for the (jobless) youth: the employment tax incentive Ebrahim, Amina Leibbrandt, Murray Ranchhod,Vimal Pirttilä, Jukka Economics The Employment Tax Incentive (ETI) is a first of its kind wage subsidy policy in South Africa. Designed to tackle the problem of youth unemployment, the ETI differs from previous policies as it aims to address unemployment through stimulating job creation. Youth unemployment has remained above 40 percent in the past ten years and is one of South Africa's key challenges. The policy was adopted in the face of this alarmingly high level of youth unemployment and at a time where the aggregate demand was low. This thesis is an important contribution to the academic literature on the demand for young workers by providing insights into this large active labour market policy intervention. The first substantive contribution is the preparation and development of a panel dataset based on payroll tax records. The tax data panel is then used to investigate the beneficiaries of the subsidy. Large firms in retail; manufacturing and financial services sectors are responsible for the highest number and largest value of subsidy claims. The subsidy is well targeted reaching younger workers in the eligible group. The subsidy is, however, only reaching half of all subsidy eligible workers. The second contribution is the investigation of job creation at the firm level. Using a matched difference-in-differences approach, a subset of ETI firms is found to have increased their employment of youth and these results are robust to various measures of youth employment. No evidence of displacement of ineligible workers if found. The third contribution explores the labour market outcomes of individuals eligible for the subsidy. Using both tax and survey data, I estimate the intention-to-treat impacts of the ETI using a triple differences method. There are very small positive effects on earnings and entry into employment and no evidence of change on overall employment and unemployment rates for young, low-wage workers. The thesis concludes by assessing the aggregate implications from these results for understanding youth unemployment in the South African labour market and the role of active labour market policy in overcoming this problem. 2021-08-12T08:54:02Z 2021-08-12T08:54:02Z 2021 2021-08-06T07:58:43Z Doctoral Thesis Doctoral PhD http://hdl.handle.net/11427/33733 eng application/pdf School of Economics Faculty of Commerce |
| spellingShingle | Economics Ebrahim, Amina A policy for the (jobless) youth: the employment tax incentive |
| thesis_degree_str | Doctoral |
| title | A policy for the (jobless) youth: the employment tax incentive |
| title_full | A policy for the (jobless) youth: the employment tax incentive |
| title_fullStr | A policy for the (jobless) youth: the employment tax incentive |
| title_full_unstemmed | A policy for the (jobless) youth: the employment tax incentive |
| title_short | A policy for the (jobless) youth: the employment tax incentive |
| title_sort | policy for the jobless youth the employment tax incentive |
| topic | Economics |
| url | http://hdl.handle.net/11427/33733 |
| work_keys_str_mv | AT ebrahimamina apolicyforthejoblessyouththeemploymenttaxincentive AT ebrahimamina policyforthejoblessyouththeemploymenttaxincentive |