Evaluation of local stimulus effects: Jobs and grants programmes

What have been the local stimulus effects of the South African Presidential Employment Stimulus Initiative (PES) and the national social grants program? The Extension of the EU-AFD Research Facility on Inequalities in partnership with SALDRU will seek to answer this question.

Context

The Covid-19 pandemic has forced societies around the world to make difficult trade-offs, as they try respond to the public health crisis on one hand, and to the economic and social distress arising out of it on the other. In South Africa, these combined crises have exacerbated already high levels of unemployment, deepening poverty and heightening levels of hunger and food insecurity.

To mitigate the combined health, social and economic crises stemming from the Covid pandemic, South African President Cyril Ramaphosa announced, in April 2020, a range of support measures to mitigate their impact, including emergency social protection and employment stimulus measures.

This project is part of the Extension of the EU-AFD Research Facility on Inequalities (RFI). Coordinated by AFD and financed by the European Commission, the Extension of the RFI will contribute to the development of public policies aimed at reducing inequalities in four countries: South Africa, Mexico, Colombia and Indonesia over the period 2021-2025.

Goals

This research project aims to study the local stimulus effects of South Africa's PES and national social grants program. In order to do so, it brings together a wide range of existing and new data sources, such as shopper data provided by Shoprite Checkers and programme participant data from Harambee Youth Employment Accelerator, which are securely merged while preserving individual anonymity using local tech company Omnisient’s proprietary encryption technology.

The primary research focus will be on the multiplier effects of these two programs, that is, the effects of the programs on the economy beyond the direct impact of spending on program participants and their households.

These program-specific multiplier effects are crucial to the overall evaluation of the programs, particularly in the context of budget constraints, but are difficult to identify in a credible empirical manner given the lack of work on them in South Africa.

In studying them, this project thus has the dual objective of characterizing the spending patterns of stimulus beneficiaries and then examining how such spending is likely to stimulate economic activity in industries further up the product supply chain. Much of the analysis proposed is descriptive and extrapolative rather than causal when it comes to quantifying multiplier effects.

Thus, the overall goal of this research is to provide an incomplete but conservative and credible quantitative baseline for thinking about program-specific multipliers in South Africa, in an environment where such evidence is lacking.

Method

Results

You will find below the different research papers related to this project :

In progress

Teachings

Download the project sheet

01/01/2022

Project start date

31/12/2023

Project end date

Fighting Inequalities

Sectors