Skills-related underemployment amongst South Africa's informally employed and self-employed: A case study of Potchefstroom

Abstract

Mainstream development theory views the informal sector as a shock absorber in an economic crisis. South Africa’s informal sector is smaller than that of many developing countries and very little research has investigated underemployment in marginal informal economic activities.This study investigated the prevalence of skills-related underemployment as well as the possible determinants and impact thereof on the income and poverty of car guards, day labourers and waste pickers in Potchefstroom.There is a need to expand the debate on skills-related underemployment to the informal sector in order to improve our understanding of the shock absorber role of the informal sector and the implications of underemployment for the labour market.A cross-sectional survey design yielded the data for the analysis. Ordinary least square and probit analysis were used as the statistical methods of analyses to answer the three research questions.