Local job multipliers from mining in South Africa’s intermediate city municipalities

Abstract

The mining industry is under pressure globally to show local benefits. But such benefits are not automatic. Studies show only moderate local effects of mining investment. This study used the Spatial Economic Activity Data: South Africa (SEAD-SA) database to investigate local job multipliers from mining. Using the full-time equivalent employment (FTE) data for nine years (2014 to 2022) in 21 industries (including mining) in 13 of South Africa’s intermediate city municipalities (ICMS), we looked at how employment in mining affects demand, and hence employment, in other sectors. Jobs in mining had a small but significant effect on accommodation and food services and on jobs linked to household employer activities. We found that, contrary to some international findings, jobs in mining had no effect on jobs in the wholesale and retail trade sector. However, in line with the international literature, we found that jobs in mining had no effect on jobs in the manufacturing sector, suggesting that there are not many backward and forward linkages between those two sectors, and that jobs in mining actually crowded out jobs in agriculture, but why this happened is not clear.