The quality of human capital in South Africa: evidence from a firm survey

Abstract

This paper examines the restrictive nature of human capital in the South African economy, and the impact it has on productivity in the manufacturing sector. These restrictions include an inadequately educated workforce and inflexible labour regulations. Survey analysis along with regression and factor analysis examine the most likely causes of productivity increases. Factor analysis revealed that productivity is driven by three underlying dimensions, namely human capital development, management’s competitiveness and location. Human capital development was also shown to be inadequate in small and medium-sized establishments.