ASSESSING THE IMPACT OF INTEREST RATE, CATERING, AND FAST-FOOD INCOME ON EMPLOYMENT IN THE SOCIAL SERVICES INDUSTRY

The employment rate is one of the economic indicators that determine a country’s economic conditions. It plays a crucial role in social welfare and national development. South Africa is currently one of the countries experiencing a growing unemployment rate owing to inefficient macroeconomic performances, such as high interest rates and low income which contribute to economic instabilities. This paper intends to analyse the effect of the real interest rate, and producer income from fast-food and catering industries on social services employment in South Africa. To achieve this objective, the study applies various statistical and econometric approaches. These approaches include the unit root test, the Wald test, the error correction model, and the Toda-Yamamoto Granger non-causality test. Findings suggested a cointegration among the underpinned variables. A positive relationship was found between social services employment and income from both fast-food and catering industries. However, the interest rate was found to have a negative long-run impact on employment growth. The short-run outcome revealed that the employment level within the social services industries may also be influenced by the lagged values of the interest rate and income from catering and fast-food industries. Grounded on these findings, the study suggests government support (subsidies and interest rate reduction) as a strategy to assist in sustaining fast-food and catering industries and creating more jobs for low-skilled workers.