Youth Unemployment and Rising Crime Rate in South Africa: Does Governance Matter?

Abstract

Abstract This study examined the nexus among governance, crime rates and youth unemployment in South Africa. The study’s objectives are: 1) to study the trending nexus on the categorical age-group of youth unemployment, crime rate and governance in South Africa. Variables proxying governance are the voice of accountability, political stability and the absence of violence/terrorism and regulatory quality 2) to investigate how crime rates and governance impact on unemployment in South Africa. Descriptive statistic forms the preliminary trend analysis; these alongside with dynamic auto-regressive distributive lag (ARDL) model have been engaged to achieve the study’s objectives. Governance series adopted in the model includes government voice of Accountability, Political Stability and Regulatory quality alongside age groups 45–54; 15–64, 35–44, 15–24; 25–34. The findings from ARDL model are reported from three separate regimes. From regime one, the findings indicate that in the long-run and holding other variables constant, only inflation and Political Stability indicator on the average rate significantly impact on youth unemployment. Increment in inflation would cause increment in the youth unemployment by 27 units but increment in Political Stability would decrease youth unemployment by 606 units. In the short-run, the main determinants of youth unemployment are inflation rate (CPI) and Political Stability in South Africa. The result revealed that unemployment gets worse in the long-run with higher inflation rate in the country. Policies to strengthen rule of law, control of corruption and government effectiveness could create wider employment opportunities for various categories of youths, reduce the crime rate at all level.