This paper evaluates structural change, inequality dynamics, and industrial policy in South Africa between 1960 and the present day. We find that South Africa experienced growth-enhancing structural transformation until the early 1970s, before...
What has the government of South Africa done with respect to COVID-19 measures of mitigation and suppression? The first COVID-19 positive case was confirmed on 5 March 2020. Just ten days later, South Africa had 61 positive cases and President...
Earnings growth in South Africa displayed a U-shaped pattern across the earnings percentiles between 2000 and 2015, resembling wage polarization in the industrialized world. We investigate whether the drivers of this example of wage polarization in...
The IRP5 and IT3(a) tax data from the South African Revenue Service have been made available to researchers through a joint project between the South African Revenue Service, the National Treasury, and UNU-WIDER. In this paper, I explain how to use...
The objective of this research is to assess the extent to which export processing zones in Botswana, Kenya, Tanzania, and Zimbabwe integrate the Sustainable Development Goals in their implementation and operations. We focused on four Sustainable...
The design and implementation of industrial policy should be closely linked to spatial considerations. Firm output and productivity are often location-specific, with factors such as the availability of physical infrastructure, proximity to sources...
An often-neglected potential negative consequence of tariffs is the impact they may have on the misallocation of factor inputs. Trade protection can provide space for domestic firms to increase prices and mark-ups, allowing low-productivity firms to...
We use a fiscal incidence model based on the South African 2014/15 Living Conditions Survey to simulate the poverty reduction impacts of a selection of medium-to-long-term social grant options with the goal of replacing the existing special COVID-19...
Millions of South Africans in thousands of demonstrations have protested the unequal allocation of public services. Despite the African National Congress’s promise to reduce the disparities generated by apartheid, the level of public services remains...
This paper uses firm-level data and a news-based measure of economic policy uncertainty to provide empirical evidence that economic policy uncertainty has a negative impact on firm-level investment in South Africa. Firms’ investment decisions in...
Agriculture and agro-processing value chains have been under pressure during the COVID-19 pandemic. This has been particularly marked where they...
This paper investigates the impact of the COVID-19 pandemic and related policy measures on livelihoods in urban South Africa. Using qualitative research methods, we analyse two rounds of semi-structured phone interviews, conducted between June and...
In most countries, traditional gender roles within the household are still common due to the prevalence and persistence of patriarchal systems. These...
The identification of foreign firms and South African multinational enterprises (MNEs) in the CIT-IRP5 panel has proved to be a challenge for many researchers. The CIT-IRP5 panel contains variables indicating different thresholds that determine...
In this paper we explore South Africa’s personal income tax system using two microsimulation models. The first, SAMOD, simulates personal income tax and social benefits using a dataset derived from the nationally representative National Income...
Introduction: data for development Globally, one of the key factors associated with increasing use of data to inform policy-making has been the increased availability of new administrative data sources. In 2014, the National Treasury of South Africa...
We present new evidence on the effects of South Africa’s Employment Tax Incentive (ETI), a hiring and employment wage subsidy aimed at reducing youth unemployment. We show that attempts to estimate firm-level treatment effects via conditional...
This paper analyses the macroeconomic effect of legislated personal income tax changes in South Africa over the 1996–2019 period. We identify personal income tax shocks using a narrative approach and incorporate these shocks in a proxySVAR model. Our...
This paper explores the impact of the first wave of the COVID-19 pandemic in South Africa on income poverty and inequality in South Africa. Using a static tax–benefit microsimulation model with input datasets that were adjusted to reflect people’s...
Overall income inequality in South Africa is very high, and inequality generated in the labour market is a key driver of inequality.In this paper, I use the Post-Apartheid Labour Market Series, the General Household Surveys, and administrative tax...
This study investigates the impacts of public expenditure innovations on exchange rate volatility in South Africa using quarterly data for the period 1970–2019. To achieve this objective, a version of the vector autoregressive impulse response model...
Tax benefits to boost contributions into pension funds or pension-related tax expenditures (PTEs) are used widely by governments worldwide to address...
The COVID-19 pandemic delivered a devastating economic shock to livelihoods across the world. In Cape Town, it has been toughest on those who had just...
The aim of this paper is to assess South Africa’s fiscal multiplier across different states of the economy, with a focus on the financial accelerator mechanism of fiscal policy shocks, by estimating impulse response functions from both linear and non...
Using the South African Revenue Service and National Treasury firm-level panel data for 2009–17, this paper investigates how global value chain-related trade affects the export performance of manufacturing firms in South Africa. In particular, the...
The impact of medical deductions and medical credits on income inequality is a subject of discussion in South Africa, as well as in many other countries, raising critical questions about the fairness of the medical tax system and the impact on...
This paper estimates the output cost of fighting inflation—the sacrifice ratio—for the South African economy using quarterly data spanning the period 1998Q1–2019Q3. To compute the sacrifice ratio, the structural vector autoregressive model developed...
This study simulates the macro-micro economic impacts of the employment policy, focusing on hysteresis in youth unemployment in South Africa. Specifically, we apply a dynamic computable general equilibrium model to calibrate the 2015 South African...
This paper empirically examines South Africa’s fiscal sustainability through a Markov-switching model which utilizes quarterly datasets for the period from 1960 to 2019. The results show that public debt responds positively, demonstrating a...
Exchange rate volatility is said to exemplify the economic health of a country. Exchange rate break points (known as structural breaks) have a momentous impact on the macroeconomy of a country. Nonetheless, this country study makes use of both...
This paper adds quantitative analysis to the study by Crompton et al. (2020), in which various alternative regulatory arrangements regarding the petrol price in South Africa were explored. We use a multi-sector dynamic computable general equilibrium...
There is growing recognition around the world that tradable services can play a valuable role in economic development. Africa is no exception, with the need for multiple routes to growth, particularly vis-à-vis the COVID-19 pandemic. Tradable...
This study considers how household composition influences the leisure time of men and women in South Africa, using the South African 2010 Time Use Survey. Studying leisure time is important since the allocation of time outside the market provides...
In September 2020, due to the ongoing pandemic, SA-TIED moved its seminar series online. What once took place at the National Treasury in Pretoria...
This note has set out several data processes that have been undertaken using the income data in dataset(s) that underpin SAMOD. Section 1 describes various data-cleaning steps that were undertaken when preparing the LCS 2014/15 as an underpinning...
Part of Book The Developer’s Dilemma
Stunted growth in early life has serious implications for cognitive development and is a well-established constraint to individual productivity and...
This paper investigates the evolution of the gender wage gap in South Africa, using the 1993–2015 Post-Apartheid Labour Market Series data set. The changes in the gap are heterogeneous across the wage distribution. There has been a substantial...
The main goal of this study—and its potential to add to the policy debate—is to cast light on the network of voices that influence the narrative about inflation and monetary policy in South Africa. To that end, this paper first identifies the main...
Work done by the African Centre of Excellence for Inequality Research (ACEIR) has documented the many-faceted nature of inequality in Ghana, Kenya, and South Africa. Conventionally measured inequality ranges from moderate (in Ghana) to extremely high...
A substantial amount of research has been conducted examining inequality in South Africa using multiple data sources. We provide an overview of this research in this paper. Furthermore, we use nationally representative survey data to estimate income...
This paper discusses the rationale and options for a fiscal anchor for South Africa and its potential for restoring and maintaining fiscal sustainability. It argues that a well designed fiscal anchor can be useful in the current fiscal milieu, but...
Research on how income inequality affects borrowing behaviour reignited after the 2008 global recession. One prevailing theory is that rising income...
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector...
Frequent electricity outages threaten to impede the benefits of expanded access achieved by many developing countries in recent decades. A large literature documents these negative effects, however almost none consider labour market effects. This...
Rising levels of income inequality and tight government budgets have spurred discussions in many developing nations about how to appropriately tax high-income earners. In this paper, we study taxpayer responses to an increase in the top marginal tax...
South Africa frequently experiences rolling blackouts (‘load shedding’) due to shortfalls in electricity generation. This is a common problem across the developing world, and yet the developmental impacts of insufficient and unstable electricity...
We use individual-level tax administrative data to estimate personal income inequality among the tax-compliant population in South Africa over the period 2011–21. Our results indicate that inequality of this population rose slightly over the period...
This paper investigates the role of firm characteristics in driving wage inequality and firm wage premia in the South African labour market. The Abowd, Kramarz, and Margolis (AKM) and Kline, Saggio, and Sølvsten (KSS) regression-based decomposition...
Wage subsidies served as a dominant labour market policy response around the world to mitigate job losses in response to the COVID-19 pandemic. However, no causal evidence of their effects exists for developing countries.We use unique panel labour...
The ethnic diversity–financial inclusion nexus remains one of the least explored topics in the literature despite global attempts to promote cultural mixing due to its socioeconomic benefits. We contribute to the literature by examining the link...
About three years have passed since the South African government introduced the COVID-19 Temporary Employer-Employee Relief Scheme (TERS) in response...
We investigate the relationship between the corporate income tax burden and firm size in South Africa using a panel dataset from companies’ tax returns. We find that medium-sized companies are experiencing the lowest effective tax rate, while the...
This issue contains seven articles addressing the major changes underway in the integration of economies in southern Africa. This special issue is based on the UNU-WIDER project 'Regional growth and development in Southern Africa'. This project aims...
Part of Journal Special Issue Regional Growth Opportunities
This paper investigates progress in reducing the high level of racial stratification of occupations after apartheid in South Africa. Empirical analysis, using census microdata and Labour Force Surveys, does not provide compelling evidence of...
Part of Book Industries without Smokestacks
The Republic of South Africa faces the imperative of escaping economic stagnation. This paper seeks to synthesize results from a series of research efforts, including but not limited to the work conducted under the UNU-WIDER project on ‘Regional...
The disruption of family life is one of the important legacies of South Africa’s colonial and apartheid history. Families were undermined by deliberate strategies implemented through the pass laws, forced removals, urban housing policy, and the...
This special issue focuses on a collaborative effort between the National Treasury and the South African Revenue Service (SARS) to employ administrative record data from SARS for economic policy analysis. It contains six research articles plus a...
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Part of Journal Special Issue Firm level analysis using administrative record data
Using comprehensive, anonymized tax administrative data for the 2008–14 period, we examine firm-level productivity in South Africa. Measures of firm-level productivity are included in a spatial autoregressive model that assesses spillovers from total...
The World Bank reports that the world loses US$160 trillion in human capital wealth due to gender wage inequality every year. Inequality is not just an issue of fairness. It is also undesirable because it hampers poverty reduction strategies and...
This paper applies recent developments in collective model estimation to elicit the household resource sharing rule, i.e. the amount of household resources accruing to fathers, mothers, and their children among African families in South Africa. We...
This paper investigates progress in reducing the high level of racial stratification of occupations after apartheid in South Africa. Empirical analysis, using census microdata and Labour Force Surveys, does not provide strong evidence of sustained or...
Traditionally, much of the research on economic growth drivers has been focused on small and medium enterprises. In recent years the academic focus on small businesses has shifted to a particular group of firms that are interesting from an economic...
South Africa has some of the highest rates of joblessness in the world and youth unemployment is particularly severe. Roughly two in five young South...
This paper aims to describe funding structures of companies liable for tax in South Africa and how this relates to other characteristics, including ownership, of the companies. The research that the paper reports on was performed as descriptive...
The recent National Health Insurance White Paper proposes redirection of medical tax credits revenue towards the financing of the national health insurance.This raises critical questions about the impact on affordability for the poor as well as...
The existing sources of demographic data for South Africa have different strengths and limitations that make them inadequate for calibration of sample weights in post-apartheid South African household surveys. The official mid-year population...
The author applies the bunching methodology to South African administrative tax data over the period from 2011 to 2017 to investigate the responsiveness of individual taxpayers to changes in marginal personal income tax rates.She finds significant...
Attempts to regulate the temporary employment sector have had mixed results internationally. In South Africa, temporary employment was regulated in 2015 through amendments to the Labour Relations Act. This paper uses administrative data to examine...
Inequality has been rising in most countries for several decades, with negative consequences for social cohesion and economic growth. Substantial gender wage gaps contribute significantly to overall wage inequality. We look at an often-overlooked...
Service industries are increasingly important in international trade and offer additional paths to economic development. There are many opportunities to expand trade in services between South Africa and other African countries. Improvements in urban...
Since the end of apartheid, South Africa’s economic challenges have disrupted efforts to establish a society of inclusive growth and prosperity. Understanding how South Africa can break the pattern of sluggish growth, high unemployment, inequality...
Technical change impacts both the employment intensity of production and the composition of occupations and skills of employment. Artificial intelligence, automation, and robots are already leading to machines undertaking routinizable tasks...
The South African liquid fuels industry is a significant part of the economy. Historically, government policy focused on import substitution industrialization to support industry margins. This approach is called into question by the 2006 shift from...
Stunted growth in early life has serious implications for children and is a well-established constraint to productivity, life expectancy, and cognitive development. This paper evaluates the relative contributions of household resources and public...
This paper examines the extent and determinants of structural poverty dynamics in South Africa, focusing on the socio-economically disadvantaged urban African population. The quantitative analysis using panel data is triangulated with evidence from a...
This paper uses detailed firm transaction data on manufactured exports to analyse the dilution of the real exchange rate-export relationship in South Africa over the period 2010 to 2014. Our empirical results show that firms that are larger, have...
Countries’ economic complexity, and the associated diversification and sophistication of their exports, is a key determinant of economic growth. Understanding how South African firms learn to export more sophisticated products is, therefore, an...
The disruption of family life is one of the important legacies of South Africa’s colonial and apartheid history. The marginalization of Africans in 'homelands' where there were few employment opportunities, forced Africans to migrate to “White” urban...
This paper seeks to identify the differentiated impacts of the crisis on specific groups of informal workers. The analysis draws on official nationally representative labour force surveys collected quarterly by South Africa’s national statistical...
Globally, corporate cash holdings have risen since the 1980s. In South Africa, some commentators have accused corporations of engaging in an ‘investment strike’, while others see corporate liquidity as a precaution against systemic uncertainty. We...
Extractive industries form an important part of the economy for many developing countries, but their impact on growth and welfare remains understudied. With global efforts to transition to net-zero carbon emissions in the coming decades...
Are there enough tax payers to generate the revenue needed by governments to reduce poverty? How adequate are the social security arrangements that...
This study analyses the performance of macroeconomic policy in South Africa in 2007–2020 and outlines challenges for policy in the coming decade. After remarkable economic growth in 1997–07, South Africa’s progress slowed dramatically in 2009 with...
This study explores the impact of the first wave of the COVID-19 pandemic in South Africa on income poverty and inequality in South Africa. Using a static tax-benefit microsimulation model with input datasets that were adjusted to reflect people’s...
Up-to-date, nationally representative household income/expenditure data are crucial to estimating poverty during the COVID-19 pandemic and to policy-making more broadly, but South Africa lacks such data. We present new pandemic poverty estimates...
This paper reviews South Africa’s monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve...
This paper investigates the impact of the COVID-19 pandemic and related policy measures on livelihoods in urban South Africa. Using qualitative research methods, we analyse two rounds of semi-structured phone interviews, conducted between June and...
Wage subsidies have served as a primary labour market policy used around the world to mitigate job losses in response to the COVID-19 pandemic. In South Africa, where unemployment is among the highest globally, the Temporary Employer–Employee Relief...
Legal identity is an important aspect of securing access to public services, such as education, healthcare, and social protection services, including child support grants. In the South African context, in the post-apartheid period, many poor South...
This paper examines employment transitions in the South African labour market. Using the Post-Apartheid Labour Market Series, it analyses flows between the formal sector, informal sector, and unemployment, paying specific attention to how these flows...
How do states rebuild nations after a major conflict? Truth and Reconciliation Commissions (TRCs) have emerged as one of the most common interventions to achieve this objective. Despite their popularity, little is known about their efficacy to foster...
Part of Book COVID-19 and the Informal Economy
Part of Book COVID-19 and the Informal Economy
Using highly disaggregated customs-transaction-level data, we study the importer price effects of tariffs in the context of preferential trade agreements for South African imports of frozen bone-in chicken. We focus first on the firm-level impact of...
In this paper we explore options for augmenting South Africa’s personal income tax revenue using two microsimulation models: PITMOD simulates the personal income tax system and is underpinned by a dataset comprising a full extract of anonymized...
South Africa ranks as the world’s most unequal country by income. This is largely due to high wage inequality, given that wages are the main income...
The South African services sector is large and growing. This coupled with declining employment shares in manufacturing and mining (i.e. deindustrialization) suggests that South Africa is a de facto service-orientated economy. Employment patterns in...
This paper provides an account of a Nambian tax-benefit microsimulation model—NAMOD—which has been developed for use by government. Following a section on the importance of social security in Namibia and recent related studies, the paper outlines the...
South Africa’s Employment Tax Incentive, launched in 2014, aimed to address low youth employment by reducing the cost of hiring young workers. We make use of anonymized tax administrative data from the 2012–2015 tax years to examine the effect of the...
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