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Working paper

Labour immigration, per capita income growth, and unemployment in post-apartheid South Africa

David Tinashe Nyagweta
October 2020

Since the inception of the post-apartheid era, South Africa has experienced considerable increase in immigration. This increase has mostly been enticed by the socio-economic outlook of the rainbow nation relative to developing nations. Unfortunately, increased immigration, particularly labour-based immigration, has spurred fierce debates on outcomes that, in many instances, manifested into xenophobic violence. Thus, this study sought to evaluate whether labour-based immigration contributes to changes in per capita income growth and unemployment using both macro and micro level data. Results from the autoregressive distributed lag, ordinary least squares, difference, and instrumental variable estimations showed that labour immigration has an insignificant causal effect on both per capita income growth and unemployment. Hence, contrary to pessimistic public and political sentiment, per capita income and unemployment are caused by broader socio-economic factors. Policies should be aimed at ensuring equitable human development with strong ties to inclusivity, job creation, constitutional obligations, and international solidarity.

Download SA-TIED Working Paper #143