Working Paper

2017-06-06

University of Cape Town

This paper examines the survival strategies of the unemployed using the balanced panel of the first three waves of the National Income Dynamics Study. We find that in response to unemployment and almost no unemployment insurance, unemployed individuals look to parents, relatives and friends for economic support. They are more likely to attach themselves to household that have some income through an employed member or in receive of state support. In many cases the unemployed delay setting up their own households while others move back into family households when faced with persistent unemployment. We use a probit model to show that the unemployed who move are more likely to be employed in a successive wave. The effect of moving on employment status remains significant and positive when we take into account household and individual characteristics. Moving allows the unemployed to get ahead.

Amina Ebrahim: PhD student in SALDRU, the School of Economics, University of Cape Town Murray Leibbrandt: The DST/NRF Research Chair in Poverty and Inequality Research, the Director of SALDRU and a Principal Investigator on the National Income Dynamics Study. Ingrid Woolard: Professor in the School of Economics, a Research Associate in SALDRU, a Principal Investigator on the National Income Dynamics Study.

Amina Ebrahim acknowledges Master’s Scholarship funding from an NRF Grand Challenges Grant to SALDRU for work on South Africa’s Unfolding Human and Social Dynamics.

Murray Leibbrandt acknowledges the Research Chairs Initiative of the Department of Science and Technology and National Research Foundation for funding his work as the Research Chair in Poverty and Inequality.