Is there a spatial mismatch in South Africa’s metropolitan labour market?

This paper investigates evidence of a possible spatial mismatch in South Africa’s metropolitan labour market that could contribute towards explaining why black unemployment rates are significantly higher than white unemployment rates. The spatial mismatch hypothesis is evaluated by considering evidence on whether (a) there has been suburbanization of jobs in South Africa, (b) residential segregation has declined, and (c) commuting costs (distance) is a significant determinant of unemployment rates. The accumulated evidence suggests that there is a spatial mismatch in at least some of the country’s metropolitan labour markets – noticeable differences were found between coastal and interior cities. It is also found that distance from the city centre generally plays a much more important role in explaining black unemployment in South Africa, even when controlling for education and income levels. In contrast, in the case of white unemployment rates, distance from the city centre is insignificant. This may suggest that the spatial mismatch in South Africa may be due to differences in ‘friction of distance’ as experienced by different groups given their differential access to transport. Areas for further research are identified.