Background paper n 16

Labour market transitions in South Africa and Indonesia: A descriptive analysis using panel data

This paper provides a descriptive and visual analysis of labour market trajectories in South Africa and Indonesia. Using a sequence analysis of individual labour market trajectories, we illustrate the presence or absence of new labour market trends in the two countries. The analysis highlights differences across cohorts, by educational background, between regions (urban vs. rural), and across gender. Given the importance of school-to-work transitions and the early career phase for mid-and long-term career prospects, we repeat the analysis for a sub-sample of people aged 15-29 years old.

Our findings corroborate the trends observed in the literature for Indonesia and South Africa. In Indonesia, employment is relatively stable with lower levels of labour market mobility and job precariousness compared to South Africa. While employment trajectories in South Africa are more unstable than in Indonesia, this also means that workers have more opportunities to exit precarious labour market conditions. Our regression analyses investigated differences in labour market trajectories by age, gender, and education. In both countries, younger as well as older individuals were more likely to be in unstable employment, while prime-age workers were the most likely to have more stable labour market trajectories. In Indonesia, younger individuals were the most likely to be out of employment, whereas older individuals were significantly more likely to be in more unstable forms of work (casual employment and self-employment). The case of South Africa is similar as both the youngest and oldest age groups were more likely to experience unstable labour market trajectories. Thus, in both countries, it is prime-age workers that have the most stable labour market trajectories over time as they are the most likely to remain as employees.