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Who creates jobs, who destroys jobs? Small firms, large firms and labour market rigidity

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Who creates jobs, who destroys jobs? Small firms, large firms and labour market rigidity

15th January 2013

By: Econ3x3

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Firm-level data for the period 2005 to 2011 indicate that job creation and destruction rates in South Africa are only slightly lower than among OECD countries. Around 10% of existing jobs are destroyed each year, while the number of new jobs is around 9.5% of existing employment. Larger firms have higher rates of net job creation than small firms. The relatively high reallocation of employment across firms suggests lower rigidities in the South African labour market than is sometimes believed.

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Written by Andrew Kerr, Senior Research Officer, Data First, University of Cape Town
Martin Wittenberg, Professor and Director: Data First, University of Cape Town
And Jairo Arrow, Deputy Director General, Methodology and Standards, Statistics South Africa

This article was first published on the Econ3x3 website – Accessible policy-relevant research and expert commentaries on unemployment and employment, income distribution and inclusive growth in South Africa.

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