South Africa is one of the largest GHG emitting countries due to its heavy reliance on coal for most of its energy needs. The South African government is cognisant of the fact that shifting away from carbon-intensive forms of technology to more sustainable ways of production means that some jobs will be destroyed, and new ones will be created. A concern therefore for policy makers is ensuring that the transition is just and that it will not exacerbate existing inequalities.

South Africa comes into this employment transition discussion facing a triple challenge: persistent high unemployment, inequality, and poverty. This situation has worsened since the 2007-2008 financial crisis and was further exacerbated by the recent COVID-19 pandemic. This complicates the discussion of an optimal social transition to a “green” economy.

This project is part of a wider research program on the just transition in South Africa, conducted with several South African research centres and in close collaboration with the South African authorities.

The project will carry out a study of the South African labour market with the aim of identifying the proportion and distribution of workers engaged in “green” jobs and “brown” jobs – in other words, jobs that are ecologically sustainable and jobs that are not. It will also examine the possibilities of transitioning labour from brown jobs into low emitting sectors.

We will measure green intensity as the share of total tasks in an occupation that are green. We will also identify the share of workers in green jobs using employment information from surveys such as the Quarterly Labour Force Surveys (QLFSs) and the Census. Using industry level information on pollution, we will go further to identify occupations more likely to be in highly polluting sectors than in any other sectors. This will be described as brown jobs. Next, we will utilise occupational tasks, skills, and knowledge information from the O*NET dataset to identify important skills for brown and green jobs. This will enable us to estimate the probability of transitioning workers to green jobs. Finally, to map the location of green jobs, we will use employment information from the Census, the Community Survey, and the Spatial Tax data.

The design of the Colombian pension system exacerbates income inequality and poverty after retirement age. High informality rates (over 60% of total employment, according to OECD) imply that many workers in Colombia have a low probability of qualifying to get a contributory pension. Despite the targeted support provided to the vulnerable population through pension assistance programs, this support  tends to be low compared to other countries in Latin America and the Caribbean.

The relationship between informality and inequality after retirement plays a central role in the discussion of policies affecting the labour market. One dimension that has not been explored in the public policy debate is how policies aimed to mitigate climate change (and more specifically the creation of green jobs) can affect the distribution of workers between the formal and informal sectors, and how it can have an impact income inequality after retirement.

Find out more about the Extension in Colombia

This project seeks to contribute to the public policy debate by analysing the effects that scenarios of a green economic transformation may have on income inequality after retirement, via the reallocation of workers between the formal and informal labour markets. 

The project will aim to answer following questions, in the Colombian context:

• What are the environmental properties of jobs?
• How can economic transformation towards a more sustainable economy change the composition and transitions between the formal and informal sector?
• What is the impact on inequality and fiscal viability of implementing those policy scenarios?

In addition, the project will evaluate prospective scenarios during the discussion of the pension reform in the  Colombian Congress and will develop a simulation model for the use of the Ministry of Finance and Public  Credit.

The project will be implemented in three stages:

• The research team will first characterize the environmental properties of jobs in Colombia.
• In the second stage, the team will calibrate the transition matrices between employment states and wages to introduce to the microsimulation model. In this stage, the team will propose the economic transition scenarios to simulate.
• In the final stage of the project, the team will prepare a final report with the simulation results and policy discussion.

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

• Quantifying Green Job Potential in Colombia: A Task-Based Approach (November 2024)
• Greening Colombia’s Energy: The Future of Jobs and Pensions (August 2025)

While there is mounting evidence that the Covid-19 pandemic has increased socioeconomic inequality, there is still a need to understand the exact channels of impact and what role the policy response has played in different contexts. It is also necessary for governments to be clear about the efficiency of the type of policies they have implemented throughout this period, in terms of the redistributive and/or regressive effect both from an inequality and poverty perspective. Indeed, we know that the amount of additional social spending (excluding health) implemented during the pandemic reached almost 3% of GDP in Colombia and only 0,2% in Mexico. However, research has not yet demonstrated whether the redistributive policies introduced by the Mexican and Colombian governments in response to the Covid-19 crisis have had any positive effect on the distribution of economic and social resources in these two countries.

The project will seek to understand what has been the redistributive impact of social and fiscal policy in Mexico and Colombia, in the context of the policies implemented during the Covid-19 pandemic.

This research project will be conducted as follows: 

1. Using the framework of the Commitment to Equity (CEQ) methodology, an analysis aiming to differentiate what has been the progressivity or regressivity of the policies implemented during the Covid-19 pandemic will be conducted. This analysis will take into account the main beneficiary groups of these policies and will include a comparison between the budget amount and the efficiency of the policies identified in terms of inequality and poverty reduction.  
2. A desktop analysis of the decision-making will also be carried out to understand how the redistributive effects of the policies implemented were envisaged by the governments. 

The results of this project are presented in the following research paper: Promoting a More Progressive Approach - Evaluating the Impact of Social and Fiscal Policies in Mexico and Colombia amidst the Covid-19 Pandemic (2025)

This research paper analyzes the redistributive impact of some fiscal policies and social programmes (direct taxes and transfers) before and after the pandemic Crisis in Mexico and Colombia, following the CEQ methodology. 

Download the paper

South Africa’s Economic Reconstruction and Recovery Plan was launched in October 2020 by the Presidency in response to the economic impacts of the Covid-19 pandemic. Besides the Presidential Employment Stimulus program, it included emergency social protection measures, among which the introduction of a special Covid-19 Social Relief of Distress grant (SRD), providing ZAR350 per month for unemployed people not covered by any other form of support. The South African government now seeks to develop options for the future of SRD grant.

Find out more about the Extension in South Africa

The objective of this research project is to produce motivated recommendations on how the SRD should be designed going forward into the longer term, in order to maximize the impact of the grant on employment outcomes and to ensure it effectively reduces poverty, while maintaining its cost to an acceptable level:

1. To maximise the impact of the grant on employment, the project needs to understand how to design and label the grant to encourage its use for job search.
2. To ensure the grant effectively reduces poverty, the project must figure out the most cost-effective way to target and assess the eligibility of recipients. Moreover, poverty reductions can be scaled up by determining measures that could encourage take up among the most disadvantaged. 

Once these goals have been achieved, and in order to inform public decision-making, these findings must be communicated to a number of stakeholders in government and civil society.

This project is part of a wider research program conducted with several South African research centres and in close collaboration with the South African Presidency. Four other research projects analysing the externalities of the Covid-19 stimulus policy are currently being developed as part of the first pillar of the Extension's activities in South Africa.

This research project uses the model generated to conduct the 2014/2015 fiscal incidence assessment and introduces updated data for 2019-2021. It simulates five scenarios around eligibility criteria, targeting mechanisms, value, disbursement model and conditionalities and computes the potential impact on poverty and employment outcomes.

You will find below the research paper related to this project: 

• Proposal for the extension, redesign and repurposing of the SRD for the goal of poverty reduction

It is worth noting that another paper has been published on the implications of the SRD grant, funded by AFD outside the Research Facility on Inequalities: Systemic exclusion from a South African social assistance transfer (February 2024)