ECS3706
Assignment 2 Semester 2 2025
Unique Number:
Due Date: 18 September 2025
QUESTION 1
STEP 1: LITERATURE REVIEW AND DEVELOPMENT OF THEORETICAL MODEL
Unemployment is one of South Africa’s most persistent macroeconomic challenges,
exacerbated by slow GDP growth, limited foreign investment, and skills mismatch in the
labour market. Understanding the key drivers behind unemployment helps policymakers
make informed decisions. Economic theory suggests that growth, investment, and human
capital are critical in shaping employment outcomes. This step reviews recent literature
(within the past 5 years) and proposes a model to capture the relationships.
Recent Journal Articles
1. Khambule & Nomdo (2022) examined the relationship between government
spending and unemployment in South Africa. Their findings showed that increased
public spending on education positively affects long-term employability, but short-term
effects are minimal.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
QUESTION 1
STEP 1: LITERATURE REVIEW AND DEVELOPMENT OF THEORETICAL
MODEL
Unemployment is one of South Africa’s most persistent macroeconomic challenges,
exacerbated by slow GDP growth, limited foreign investment, and skills mismatch in
the labour market. Understanding the key drivers behind unemployment helps
policymakers make informed decisions. Economic theory suggests that growth,
investment, and human capital are critical in shaping employment outcomes. This
step reviews recent literature (within the past 5 years) and proposes a model to
capture the relationships.
Recent Journal Articles
1. Khambule & Nomdo (2022) examined the relationship between government
spending and unemployment in South Africa. Their findings showed that
increased public spending on education positively affects long-term
employability, but short-term effects are minimal.
2. Adegbite & Ayadi (2021) found a statistically significant negative relationship
between FDI and unemployment in sub-Saharan African countries. The study
noted that stable investment climates attract FDI that creates jobs, particularly
in the industrial and services sectors.
3. Chinomona & Hlongwane (2023) used regression analysis to explore how
GDP growth impacts unemployment in BRICS countries. Their findings
confirm Okun’s Law, which states that unemployment falls as GDP increases,
but the relationship is weak in countries with structural labour market issues.
4. Ngwenya & Mokoena (2020) studied education funding and labour
absorption in South Africa. They concluded that while public education
spending is high, the quality and relevance of education for the labour market
are key missing links.
5. Mpofu & Mlambo (2023) assessed the role of government policy in mediating
the effects of FDI on employment in developing economies. Their study
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
Assignment 2 Semester 2 2025
Unique Number:
Due Date: 18 September 2025
QUESTION 1
STEP 1: LITERATURE REVIEW AND DEVELOPMENT OF THEORETICAL MODEL
Unemployment is one of South Africa’s most persistent macroeconomic challenges,
exacerbated by slow GDP growth, limited foreign investment, and skills mismatch in the
labour market. Understanding the key drivers behind unemployment helps policymakers
make informed decisions. Economic theory suggests that growth, investment, and human
capital are critical in shaping employment outcomes. This step reviews recent literature
(within the past 5 years) and proposes a model to capture the relationships.
Recent Journal Articles
1. Khambule & Nomdo (2022) examined the relationship between government
spending and unemployment in South Africa. Their findings showed that increased
public spending on education positively affects long-term employability, but short-term
effects are minimal.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
QUESTION 1
STEP 1: LITERATURE REVIEW AND DEVELOPMENT OF THEORETICAL
MODEL
Unemployment is one of South Africa’s most persistent macroeconomic challenges,
exacerbated by slow GDP growth, limited foreign investment, and skills mismatch in
the labour market. Understanding the key drivers behind unemployment helps
policymakers make informed decisions. Economic theory suggests that growth,
investment, and human capital are critical in shaping employment outcomes. This
step reviews recent literature (within the past 5 years) and proposes a model to
capture the relationships.
Recent Journal Articles
1. Khambule & Nomdo (2022) examined the relationship between government
spending and unemployment in South Africa. Their findings showed that
increased public spending on education positively affects long-term
employability, but short-term effects are minimal.
2. Adegbite & Ayadi (2021) found a statistically significant negative relationship
between FDI and unemployment in sub-Saharan African countries. The study
noted that stable investment climates attract FDI that creates jobs, particularly
in the industrial and services sectors.
3. Chinomona & Hlongwane (2023) used regression analysis to explore how
GDP growth impacts unemployment in BRICS countries. Their findings
confirm Okun’s Law, which states that unemployment falls as GDP increases,
but the relationship is weak in countries with structural labour market issues.
4. Ngwenya & Mokoena (2020) studied education funding and labour
absorption in South Africa. They concluded that while public education
spending is high, the quality and relevance of education for the labour market
are key missing links.
5. Mpofu & Mlambo (2023) assessed the role of government policy in mediating
the effects of FDI on employment in developing economies. Their study
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
