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AEC 2012 - The Inability of Small Firms to Generate Employment in a High Wage Regime: the South African Wage Curve and Implications for Wage Subsidies


Despite being Africa's largest economy, South Africa still has an uncharacteristically high unemployment rate, with the formal economy unable to absorb (predominantly unskilled) surplus labour. While early claims of jobless growth in the post-apartheid era have been refuted, the rise in unemployment over the early post-transition period remains one of the largest policy issues, particularly because the youngest generations have received more education, but have not been absorbed into the labour market and have added to the stock of the unemployed (Burger & von Fintel, 2009) (Burger, Van der Berg, & von Fintel, 2012)

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