DISEQUILIBRIUM IN THE LABOR-MARKET IN SOUTH-AFRICA

Unemployment in South Africa is decomposed into a cyclical and a struc tural component. The estimates suggest that unemployment is largely st ructural. Alternative explanations for the persistence of deviations o f market wages from full-employment levels are examined. Three models that are empirically capable of generating the observed wage and emplo yment gaps are presented. The predictions of the models for wages and employment are discussed in light of recent and prospective developmen ts in South Africa.