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

See all articles by Luca Tiberti

Luca Tiberti

Université Laval; Partnership for Economic Policy (PEP)

Hélène Maisonnave

Le Havre University; Université Laval; Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE); Partnership for Economic Policy (PEP)

Margaret Chitiga

Human Sciences Research Council of South Africa

Ramos Emmanuel Mabugu

Financial and Fiscal Commission

Veronique Robichaud

Université Laval

Stewart Ngandu

Human Science Research Council

Date Written: March 20, 2013

Abstract

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

Tiberti, Luca and Maisonnave, Hélène and Chitiga, Margaret and Mabugu, Ramos Emmanuel and Robichaud, Veronique and Ngandu, Stewart, The Economy-Wide Impacts of the South African Child Support Grant: A Micro-Simulation-Computable General Equilibrium Analysis (March 20, 2013). PEP Working Paper serie 13-03. Available at SSRN: https://ssrn.com/abstract=2236404 or http://dx.doi.org/10.2139/ssrn.2236404

Luca Tiberti (Contact Author)

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Partnership for Economic Policy (PEP)

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Hélène Maisonnave

Le Havre University ( email )

25 rue Philippe Lebon
Le Havre, 76600
France

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE)

Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada

Partnership for Economic Policy (PEP)

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Margaret Chitiga

Human Sciences Research Council of South Africa ( email )

South Africa

Ramos Emmanuel Mabugu

Financial and Fiscal Commission ( email )

South Africa

Veronique Robichaud

Université Laval ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Stewart Ngandu

Human Science Research Council ( email )

134 Pretorius Street
Pretoria
South Africa

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