Overview

Promoting exports is often an important policy option for small open economies like South Africa. It was certainly thought that trade would contribute to job creation. Yet there has been concern that trade has encouraged greater capital intensity. This paper compares labour absorption that arises from trade and from the domestic market. It takes this further to consider employment created by export destination. A fuller understanding of employment implications is made possible by using a social accounting matrix to take into account both direct and indirect employment. This is the first in a planned series of papers to explore the respective role of traded and domestically oriented sectors in generating the employment needed to rapidly expand employment opportunities in South Africa.

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