The Link Between Social Grant and Employment in South Africa

The literature has analyzed the link between social grants, means-tested and unconditional on employment, and employment in South Africa. The country’s social grant expenditure is relatively large amid persistently high unemployment.
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Volume/Issue: Volume 2023 Issue 039
Publication date: June 2023
ISBN: 9798400243493
$15.00
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Topics covered in this book

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Labor , Economics- Macroeconomics , Money and Monetary Policy , International - Economics , Demography , Distributional effects , employment , household survey , social grants , South Africa , disability grant recipient , panel household survey , grant expenditure , employment in South Africa , employment probability , Aging , Income

Summary

The literature has analyzed the link between social grants, means-tested and unconditional on employment, and employment in South Africa. The country’s social grant expenditure is relatively large amid persistently high unemployment. This study uses a large panel household survey spanning a decade to find that old-age and disability grant recipients are less in employment as intended by the social program, consistent with the literature. The study adds to the literature by showing that, among “indirect recipients,” younger members typically have lower employment prospects than other indirect recipients. There could be various explanation for this finding, including that the youth are more discouraged from seeking jobs, face larger constraints in the labor market, or have less job opportunities.