National Treasury responds to YCL comments

Wednesday, May 23, 2012

Pretoria - National Treasury has refuted comments by the Young Communist League (YCL) over a pilot project on the youth wage subsidy.

On Tuesday, the YCL issued a statement saying that the pilot project run by the University of the Witwatersrand on behalf of the National Treasury had proved to be a failure, Treasury noted in a statement.

"The YCL's information is not true. The facts are as follows, given the scale of youth unemployment in South Africa, National Treasury, working with the Department of Labour and other government departments, commissioned the University of the Witwatersrand to investigate the dynamics of the youth labour market in South Africa," it said.

Since 2009, the study has been tracking a sample of 4 000 young people in Gauteng, KwaZulu-Natal and Limpopo as well as a sample of firms who hire young people to understand how the youth labour market evolves.

"As part of this study, the research team has been testing the impact of a hiring voucher among the group. This is different to the design of the youth employment subsidy proposed in the discussion paper published in February last year and currently being discussed by Nedlac," Treasury explained.

Preliminary results collected a year after allocating hiring vouchers to young people showed that those with vouchers were significantly more likely to be employed than those without one.

Researchers were currently working on understanding the mechanisms through which vouchers impacted on employability.

"The study has also been investigating a range of factors influencing the youth labour market and youth unemployment, including the impact of employment services provided by the labour centres (run by the Department of Labour), the behaviour of job searchers and labour recruiting firms, and the school-to-work transition," Treasury said.

Final results of the study were not yet available as researchers were still collecting the last wave of data on the pilot.

"It is the intention of the National Treasury and Wits University to publish the results of the study later this year," it added.