Ending poverty and accelerating growth in South Africa, through the expansion of its social grant system
In: Journal of policy modeling: JPMOD ; a social science forum of world issues
ISSN: 0161-8938
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In: Journal of policy modeling: JPMOD ; a social science forum of world issues
ISSN: 0161-8938
In: The European journal of development research, Band 34, Heft 3, S. 1627-1644
ISSN: 1743-9728
World Affairs Online
A computable general equilibrium model linked to a microsimulation model is applied to assess the potential short-term effects on the South African economy of the ongoing COVID-19 pandemic. With a particular focus on distributional outcomes, two simulations are run, a mild and a severe scenario. The findings show significant evidence of decline in economic growth and employment, with the decline harsher for the severe scenario. The microeconomic results show that the pandemic moves the income distribution curve such that more households fall under the poverty line while at the same time, inequality declines. The latter result is driven by the disproportionate decline in incomes of richer households while the poorest of the poor are cushioned by government social grants that are kept intact during the pandemic. The COVID-19 pandemic is still unfolding and its economic modelling as well as the data used to operationalise the model will need to be updated and improved upon as more information about the disease and the economy becomes available.
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