Strategies of the unemployed in South Africa: Does moving allow the unemployed to get ahead?

Abstract

This paper examines the survival strategies of the unemployed using the balanced panel of the first three waves of the National Income Dynamics Study. We find that in response to unemployment and almost no unemployment insurance, unemployed individuals look to parents, relatives and friends for economic support. They are more likely to attach themselves to household that have some income through an employed member or in receive of state support. In many cases the unemployed delay setting up their own households while others move back into family households when faced with persistent unemployment. We use a probit model to show that the unemployed who move are more likely to be employed in a successive wave. The effect of moving on employment status remains significant and positive when we take into account household and individual characteristics. Moving allows the unemployed to get ahead.