Browsing by Author "Gwebu, Ndumiso"
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Item Does public sector employment crowd out private sector employment? the case of South Africa(University of Fort Hare, 2025-08-22) Gwebu, Ndumiso; Kapingura, F MThe main objective of the study is to establish whether public sector employment crowds out private sector employment in South Africa. Time series data for the period from 2000Q1 to 2022Q4 was utilised in the analysis. The Autoregressive Distributed Lag Model cointegration technique was employed to evaluate the long-term relationships and short run dynamic interactions among the variables. The data's time series properties were examined using the Phillips Perron and Augmented Dickey Fuller unit root tests. The results revealed that public sector employment has a positive effect on private sector employment in South Africa. The results imply that public sector employment compliments private sector employment in South Africa. The results also revealed that trade openness, centralised collective bargaining, hiring and firing regulations, and unemployment have a negative effect on private sector employment. Conversely, GDP growth and labour market regulations have a positive effect on private sector employment in South Africa. The results imply that public sector employment does not crowd out private sector employment in South Africa. This result contributes to the ongoing discussion of whether changes in the public employment level is a practical tool for promoting private sector employment. Policies should be guided towards cautiously increasing government expenditure towards government programmes, which would contribute towards an increase in public sector employment leading to a multiplier effect on private sector employment.