The Economy-Wide Impacts of the South African Child Support Grant: A Micro-Simulation-Computable General Equilibrium Analysis
PEP Working Paper serie 13-03
37 Pages Posted: 22 Mar 2013 Last revised: 16 Jul 2018
Date Written: March 20, 2013
We examine the economy-wide impact of the child support grant (CSG) on the South African economy using a bottom-up/top-down approach. This allows us to estimate the potential effects on households’ welfare and on the economy following a change in the CSG. Three simulations are presented, in simulation 1 the value of the CSG is increased by 20%; in simulation 2 the number of beneficiaries among the eligible children is increased by two million and simulation 3 combines these two. A positive link between the CSG and the probability of participating in the labour market is found. The positive impacts on the labour market, together with the increase in the transfers received by households, results in an increase in their income. Poverty decreases in comparison with the base year for the whole population and for children. Finally, we can conclude that simulation 1 is the most cost effective of the policies.
Keywords: Child support grant, computable general equilibrium, micro-simulation, poverty, South Africa
JEL Classification: D58, E24, E6, H53, I3, J01, O55
Suggested Citation: Suggested Citation