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Publications (495)
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
This paper uses survey and tax administrative data to analyse the effects of a sizeable employer-borne payroll tax credit for young, low-wage workers in South Africa. We find fairly limited impacts of the wage subsidy on the employment of young, low-wage workers relative to two comparison groups...
Launched on 1 September 2024, South Africa's two-pot retirement system is designed to offer greater flexibility in managing retirement savings. This system allows individuals to access a portion of their thretirement funds before retirement through a ‘savings pot’, while a ‘retirement pot’ remains...
South Africa's unemployment rate stands at a staggering 32.1%—one of the highest in the world. Coupled with an alarming poverty rate, where nearly half of the population lives below the poverty line, the socioeconomic landscape is dire. Amidst these challenges, the special COVID-19 Social Relief of...
On 25 May 2023, three-year-old Neyamiah James died after extended electricity outages in Johannesburg caused her home oxygen machine to run out of backup power. On 4 March 2023, Yengiwe Mthimunye died after being turned away from Waterval Clinic in Mpumalanga because of a power outage. Bhekisisa...
Blog
In recent years, governments worldwide witnessed a surge in debt levels. According to the Institute of International Finance, global debt reached a staggering USD 315 trillion in early 2024, with sizable increases in emerging market countries. This increase in borrowing, at least by governments, was...
Working Paper
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The public-debt-to-GDP ratio in South Africa increased from 26 per cent in the 2008/09 fiscal year to 73.9 per cent in 2023/24, raising fears that fiscal policy is not sustainable. This raises the question: did the government take steps to arrest the increase in the debt-to-GDP ratio and regain...
Working Paper
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Refunds are an essential feature of well-functioning VAT systems and take up a sizeable portion of government spending. In South Africa, refunds amount to 50 percent of gross VAT collection, representing a substantial transfer from the government to taxpayers that has to occur at relatively high...
Working Paper
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– The equity implications of taxing more to expand the South African social security system
In this paper, we use a static fiscal incidence analysis model to evaluate the poverty and inequality impacts of using fiscal policy to finance expanded social spending in South Africa. We assess three methods to enhance the social protection system’s equity objectives: increasing the size and/or...
Working Paper
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– Evidence from individual-level administrative tax data
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, with the Gini coefficient increasing from 0.64 to...
Working Paper
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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 Africans benefited from well-organized civil...
South Africa faces a dual challenge of limited fiscal space—the need to raise sufficient revenues to finance public services—and high levels of inequality. One possible solution is to raise tax rates on the rich. If successful, such reforms could increase revenues and mitigate income inequalities...
Working Paper
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– Evidence from a firm‐level panel
In this paper, we use the new economic geography (NEG) framework to estimate the extent to which spatial wage disparities in the South African manufacturing sector are an outcome of economic forces such as market access. To test the relationship, we use the anonymized tax data on employers and...
As a young data developer responsible for mining and analysing the administrative tax data provided to researchers through the SA-TIED programme, I am acutely aware of the economic challenges faced by the average South African, particularly young people. According to recent data from Statistics...
Working Paper
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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 supply, and the benefits of mitigating this, are...
In South Africa, the power grid undergoes rotational, scheduled outages—or rolling blackouts—most commonly referred to as load shedding. Load shedding is primarily a consequence of frequent breakdowns at the national utility. These are due to a combination of poor long-term planning, a lack of...
Working Paper
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South Africa’s current electricity crises have worsened, placing the country on an uncertain and turbulent economic trajectory.To identify the manufacturing sub-sectors that are most vulnerable to this crises, we use the input–output matrices for the period between 1993 and 2021 to develop a sub...
Working Paper
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– Economic impact under the microscope
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 rate in South Africa, drawing on exceptionally...
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– What Is Missing from National Economic Recovery Plans?
From the book:
COVID-19 and the Informal Economy
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Accounts from Residents of Cape Town’s Largest Township
From the book:
COVID-19 and the Informal Economy
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Differentiated Impacts and an Uneven Recovery
From the book:
COVID-19 and the Informal Economy
Blog
The climate stabilization imperative emerging from the Paris Agreement is, in so many ways, absolutely critical to securing the planet’s future for all. The Agreement necessitates a transition away from fossil fuel-based economic production, particularly the use of coal as a source of energy. In...
Working Paper
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We estimate structural, materials, and labour markups for the South African economy at the three-digit industry level for 2012–19. The fall in structural labour and materials markups found for the numerical majority of industries are generally isolated to smaller industries, with industries...
Background Note
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Over 60 years ago, Guy Orcutt and colleagues pioneered the use of microsimulation models in the social sciences to analyse the impact of social and economic policies. Although computational and data constraints initially hampered progress, these barriers were overcome and microsimulation modelling...
Blog
In monetary policy communication, every word carries weight. Consider this scenario: the South African Reserve Bank (SARB) articulates its stance to anchor inflation expectations, yet this message undergoes subtle transformations when translated by the media and financial analysts. How do divergent...
Working Paper
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Given the rise in the government debt level in recent times, this paper aims to examine the effect of an increase in government size on risk premium and its transmission in the economy. We jointly identify the term spread shock (originating at the short end and the long end) and the government size...
Working Paper
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Rising globalization has exerted a downward pressure on global tariffs, thereby eroding tariff revenues in developing nations. We analyse how gains from lowering import tariffs are distributed within the firm and the corresponding tax (base) implications. First, we study the effect of tariff changes...
Working Paper
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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 paper merges labour force survey microdata with high...
Working Paper
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– The case of poultry in South Africa
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 tariffs on import prices. Findings suggest no pass...
Blog
Sub-Saharan Africa has abundant natural resources and a substantial market, with an estimated population of 1.2 billion. The population is projected to grow by nearly 80% and reach almost 2 billion people by 2043. This population growth is expected to parallel an economic expansion, with annual...
Blog
New analysis of income data in South Africa shows the gender pay gap—how much more men earn than women—has increased. According to findings from a study conducted by the SA-TIED programme, in 2021, women in South Africa earned 78 cents for every rand earned by men, compared to 89 cents in 2008. This...
Blog
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 source for the majority of the working population. Exploring the nuances of this inequality prompts a critical question: what is the extent of employers...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
This article is the first to provide estimates of how minimum wages affect worker flows and employment growth rates in an employment scarce developing country context. We investigate the effects of a large, exogenous increase in agricultural minimum wages in South Africa. We find that changes...
Working Paper
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– A City of Cape Town case study
Addressing unemployment and income inequalities in transport and land-use policies is important, particularly in South Africa, which is currently experiencing one of the highest unemployment rates and income inequality in the world. This research investigates the horizontal (geographical...
Working Paper
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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 individual-level administrative tax data; and SAMOD...
Working Paper
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– A microsimulation model approach using tax administrative data
South Africa has a progressive broad-based personal income tax system with relatively few tax expenditures. The two most important are the medical contribution plus additional tax credits for medical expenses, and the deductions allowed for retirement contributions. A pertinent question for tax...
Working Paper
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Faced with more favourable demand conditions, many firms raise wages. However, we show that firms with labour market power, lower productivity, and binding wage floors will absorb these positive revenue productivity shocks as excess profits instead of increasing wages or employment.Our prediction...
Blog
The South African constitution is considered progressive and transformative in intention due to its inclusion of socioeconomic rights, such as the right to education, food, and healthcare. However, some of these rights are qualified by the availability of state resources, which places an imperative...
Working Paper
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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 methods are applied to matched employer–employee...
Working Paper
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The South African constitution is considered progressive and transformative in intention due to its inclusion of socioeconomic rights, such as the right to education, land, food, and healthcare. However, some of these rights are qualified by the availability of resources to the state, which places...
Working Paper
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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 between ethnic diversity and financial inclusion using...
Blog
Data is the key to informed decision-making in today's rapidly changing world. As nations strive to address complex economic challenges, data-driven insights have become indispensable. South Africa is no exception, facing issues like declining GDP per capita, sluggish productivity growth, and rising...
– But not without some unintended results
About three years have passed since the South African government introduced the COVID-19 Temporary Employer-Employee Relief Scheme (TERS) in response to the pandemic and associated lockdown regulations. Given the extent of unemployment in South Africa even prior to the pandemic, the policy’s primary...
Journal Article
We design a lab-in-the-field experiment involving naturally occurring groups operating in three South-African townships. We introduce an incentives-based mechanism named 'participatory incentives' consisting of monetary incentives that are awarded conditional on the group reaching a threshold of...
Working Paper
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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 individuals (journalists, domestic policy makers...
Working Paper
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– Evidence from South Africa
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 force survey data and exploit a temporary...
Blog
In celebration of South Africa's Women's Month, SA-TIED is spotlighting women driving change in economics. Through the 'Breaking Barriers, Building Economies: Women in Economic Policy' campaign, we highlight their achievements, challenges, and invaluable contributions. Pumla Bam, Senior Specialist...
Blog
In celebration of South Africa's Women's Month, SA-TIED is spotlighting exceptional women with the 'Breaking Barriers, Building Economies: Women in Economic Policy' campaign. Among these leaders is Nadine Riedel, whose journey in economics and economic policymaking reflects an unwavering commitment...
Blog
As part of the SA-TIED ‘Breaking Barriers, Building Economies: Women in Economic Policy' initiative, Georgina Ryan emerges as a visionary force driving economic transformation. With a research-driven foundation and a master's in development studies, Georgina's journey has been guided by a commitment...
Blog
In celebration of South Africa's Women's Month, SA-TIED is spotlighting the women driving change within the field of economics. Through the ‘Breaking Barriers, Building Economies: Women in Economic Policy’ campaign, we highlight their achievements, challenges, and invaluable contributions. Mamiky...
Blog
– How SA-TIED transformed my career
When I began my role as a research assistant for the SA-TIED programme in January 2020, I didn’t know that it would lead me to such prestigious institutions like Yale University and the World Bank. The programme has been instrumental in shaping my career and providing me with opportunities to...
Blog
In celebration of South Africa's Women's Month, SA-TIED is spotlighting the women driving change within the field of economics. Through the ‘Breaking Barriers, Building Economies: Women in Economic Policy’ campaign, we highlight their achievements, challenges, and invaluable contributions. Carol...
Working Paper
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– A large time-varying parameter vector autoregression approach
A critical requirement for efficient fiscal policy is a reliable understanding of its impact on the aggregate economy for different policy instruments and under different economic conditions. Indeed, there is strong evidence to suggest that fiscal multipliers vary with economic conditions, the...
Working Paper
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– ACEIR research and the WIID
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 (in South Africa). Trying to tell one coherent...
Working Paper
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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 notes that the popularity of fiscal rules belies an...
Blog
Nearly half the working-age population and nearly two-thirds of the unemployed live in areas designated as townships under apartheid spatial laws. Originally developed as 'labour dormitories', they have been challenging to develop as more vibrant local economies and residential areas. What can the...
Blog
The South African rail freight sector is currently facing a crisis of operational efficiency, which is having a significant economic impact. In the bulk mineral corridors, reduced rail capacity has prevented South Africa from benefiting from recent mineral price booms. The general freight rail...
Working Paper
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Throughout 2021, fiscal stimulus packages were introduced to jump-start the COVID-19 ‘post-pandemic’ economic recovery process. While calls for economic recovery packages that promise to ‘build back better’ have come from many directions, the under-allocation of recovery resources directed at...
Working Paper
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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 and consumption inequality in South Africa between...
Working Paper
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– The sub-Saharan experience
COVID-19 cases were first confirmed in March 2020 in Ghana, Kenya, and South Africa. These countries put in place several stringent measures, including lockdowns, to contain the spread of the virus. Various policies were also rolled out to address the disruption in economic activities, to mitigate...
Working Paper
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In this study, we provide a comprehensive estimation of the contemporary Phillips curve relationship in the South African economy using a novel deep learning technique. Our approach incorporates multiple measures of economic slack/tightness and inflation expectations, contributing to the debate on...
Working Paper
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– The role of financial regimes
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 autoregression model is estimated which allows the...
Working Paper
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– Evidence from South Africa
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 reconciliation and nation building. We fill this...
Blog
– Bosses are part of the problem
South Africa is one of the most unequal countries in the world. This income inequality is mostly due to high unemployment and large differences in wages.In South Africa today, economists and policymakers typically focus on worker characteristics such as education to address wage inequality...
Research on how income inequality affects borrowing behaviour reignited after the 2008 global recession. One prevailing theory is that rising income inequality in the US and other high-income economies eroded real household incomes and prompted more and more borrowing. This growing debt culminated...
Working Paper
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– Examining worker flows during normal and recessionary periods in South Africa
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 differ during recessions. It explicitly considers...
Working Paper
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– Income and taxable income, adjusted for retirement fund and medical expense reporting changes
Tax administration statistics now provide considerably more complete and reliable measures of South African personal income and its distribution than the available household or other survey sources. However, there are difficulties in using tax data across time, as both policy and reporting changes...
Technical Note
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This technical note describes the compilation of a 2019 Social Accounting Matrix (SAM) for South Africa. SAMs are economy-wide databases that are used together with analytical techniques to strengthen evidence-based policy analysis. This SAM is based on a supply table and a use table for 2019...
Working Paper
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– Examining the impact of relative income on formal and informal debt in South Africa
How does income inequality impact the propensity for and levels of formal and informal household debt? This paper assesses this question using the two most recent waves of the South African Living Conditions Survey. A range of linear models as well as a zero-inflated Poisson model are employed, and...
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
From the book:
Tasks, Skills, and Institutions
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– A view from below
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 September 2020 in the township of Khayelitsha, Cape...
Working Paper
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– Individual impacts of the Employment Tax Incentive
This paper uses survey and tax administrative data to analyse the effects of a sizeable employer-borne payroll tax credit for young, low-wage workers in South Africa. We find limited impact of the wage subsidy on employment of young, low-wage workers relative to two comparison groups: slightly older...
Working Paper
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– Evidence from South Africa during the COVID-19 pandemic
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 Scheme supported millions of workers in a far...
Working Paper
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Previous economic downturns such as the 2008–09 Global Financial Crisis disproportionately affected male employment due to greater contractions in industries typically filled by men (e.g., manufacturing). However, after the imposition of the ‘hard’ COVID-19 lockdown between 2020 quarter 1 and 2 in...
Working Paper
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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 use the unique South African Revenue Service...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
Anecdotal evidence suggests that involving beneficiaries in charity decision-making ensures better governance processes. This study provides the first experimental test of the effects of beneficiaries’ participation in the decision of how to spend a charity's funds. We consider four different...
Working Paper
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– Estimating the impact of pandemic job loss on poverty in South Africa
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, simulating incomes in pre-pandemic household surveys...
‘I intend to see a world in which tax policy research is based on evidence, and policy decisions are data-driven.’ This is an aspiration expressed by a participant of the WIDER Winter School 2022. The comment summarizes well the reasoning behind the course and UNU-WIDER’s goals for domestic revenue...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Poverty dynamics and inequality in South Africa between 2008 and 2017
Longitudinal surveys allow us to understand how markers of (dis)advantage determine present material welfare and economic upward or downward mobility over time. In this paper, we use five waves of panel data to empirically assess the extent and dynamics of poverty in South Africa between 2008 and...
Working Paper
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Microsimulation approaches to studying shocks and social protection in selected developing economies
This paper calculates automatic stabilization in Ghana, South Africa, and Ecuador to explain income cushioning amid income and demand shocks. Fiscal policies within these countries are also stress tested to gauge welfare contingencies and insurance. A discretionary action approach is adopted for...
Working Paper
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– An exploration of tensions over race-based policies of redress and redistribution in South Africa
Capital spending on infrastructure presents a significant counter-cyclical tool, however contested it might be in a society as unequal as South Africa. The history of racial capitalism, race-based exclusion from economic participation, and an enduring political economy based on the concentration of...
Working Paper
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– Or what to do when r > g
South Africa runs a primary fiscal deficit and the long-term interest rate on government borrowing, r, is greater than the long-term economic growth rate, g. Without intervention, debt will continue to rise until there is a disorderly fiscal stop. Reforms to raise growth have not materialized...
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– South Africa’s Kuznetsian tension
From the book:
The Developer’s Dilemma
Working Paper
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– A stalled recovery
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 agency (Statistics South Africa). Based on an...
Background Note
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IntroductionThe South African youth wage subsidy started in 2014 to increase employment and create jobs for low-wage youth. The subsidy was temporarily raised in value and expanded to reach more workers due to the COVID-19 pandemic. During the lockdown period, the government used the subsidy to curb...
Report
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– Social transfers in South Africa during the coronavirus national lockdown, 2020
This case study details the policy choices and decisions of the South African government to provide economic relief, through social grants, to vulnerable South Africans and those resident in South Africa to enable them to withstand the effects of the coronavirus pandemic. The first phase of this...
Working Paper
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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 Bank managed to guide inflation in line with the 3–6...
Working Paper
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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, understanding the local impacts of the extractives sector is...
Working Paper
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– South Africa (2007–2020)
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 the global financial crisis. Real GDP growth...
Are there enough tax payers to generate the revenue needed by governments to reduce poverty? How adequate are the social security arrangements that already exist? Anyone who has started to probe these issues will know that the answers to such questions can be hard to pin down. This is why the...
Blog
– The power of ideas & the limits of technocracy
What will it take to shake loose the distemper of our times, and initiate a virtuous spiral of renewal? In a recent UNU-WIDER webinar, Alan Hirsch and I explored why a narrow focus on growth and good governance will not be enough to get South Africa (and, by analogy, other countries similarly...
Working Paper
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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 survive, thereby leading to a sub-optimal...
Working Paper
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This paper presents version 4.0 of the CIT-IRP5 firm-level panel dataset. Version 4.0 is the latest edition of the firm-level component of the combined administrative data using sources from the South African Revenue Service. We show that differences in forms and vintages do generally not preclude...
Working Paper
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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 Social Relief of Distress grant upon its expiry...
Working Paper
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– A narrative analysis
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 analysis shows that permanent changes in personal...
Working Paper
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Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the private sector through a higher risk premium on interest...
Technical Note
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– CIT-IRP5 panel v4.0
We update Kreuser and Newman’s (2018) total factor productivity estimates for the South African manufacturing sector using administrative data from 2009–17. We use standard implementations of the Ackerberg et al. (2015) and Wooldridge (2009) productivity estimators and introduce an implementation of...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
This study shows that occupations in South Africa are segregated and stratified by gender. While some women (mostly Black and 'Coloured') overwhelmingly fill low-paying jobs, others (mostly White and Indian/Asian, but also Coloured) tend to fill higher-paying professional positions. This study finds...
Technical Note
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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 dataset for SAMOD. Part 2 elaborates on the process...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
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 earned incomes just before the pandemic (March 2020)...
Working Paper
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How does centralized bargaining affect the broader wage structure? And what does this tell us about the (non-)competitive dynamics of such labour markets? I study large contracted wage increases negotiated by centralized bargaining councils in South Africa, using matched employer–employee tax panel...
Stunted growth in early life has serious implications for cognitive development and is a well-established constraint to individual productivity and life expectancy. Vulnerability in childhood is highly correlated with stunted growth in many developing countries and is therefore a pressing concern...
Working Paper
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– A comparison of PITMOD and SAMOD for tax year 2018
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 Dynamics Study survey. The second, PITMOD, simulates the...
Working Paper
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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 difference-in-differences are likely to fail when...
Journal Article
– Rapidly increasing top incomes amid low national growth in South Africa
Despite South Africa’s need for inclusive economic growth, we find that the top income percentiles continue to diverge from the rest of the income distribution. We compare household survey data and tax data (which, unlike household survey data, includes accurate data for the very rich) to...
Working Paper
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– Evidence from South African tax administrative and products data
Enterprise development, especially expansion into export markets, is essential to create employment and unlock growth potential in many economies, including in sub-Saharan Africa. However, both firm and product survival (mainly in the export market) is not sufficiently documented to inform business...
Working Paper
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– Evidence from South Africa
There is a large literature on the minimum wage focused on directly exposed firms and geographies. This paper provides new evidence that the minimum wage has significant spillover effects on firms exposed to the minimum wage indirectly via firm supply chains. Using administrative firm-level tax data...
Background Note
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– The South African experience
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 (NT) pioneered the development of new tax...
Working Paper
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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 microdata to describe earnings inequality in South...
Working Paper
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– The role of trade credit
We study the role of trade credit in enhancing the resilience of financially constrained firms from 2010 to 2017. Implicit borrowing in trade finance allows financially constrained firms to bridge the financing gap, expand employment by 8.26 per cent, and increase average firm profits significantly...
Working Paper
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– An impulse response analysis by local projections for South Africa
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-linear local projections. The model finds...
Blog
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 found a way to keep their heads above water, living on the fringes of urban society. The COVID-19 lockdown in South Africa was one of the earliest...
Tax benefits to boost contributions into pension funds or pension-related tax expenditures (PTEs) are used widely by governments worldwide to address issues related to the aging of population and the sustainability of retirement systems. Although these goals are worth pursuing, PTEs are often highly...
Working Paper
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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 proposed by Jordà is employed and the innovations...
Working Paper
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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 earned incomes just before the pandemic (March 2020)...
Working Paper
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– The political logic of service distribution in South Africa
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 highly uneven across the country. Most studies of...
In most countries, traditional gender roles within the household are still common due to the prevalence and persistence of patriarchal systems. These roles put a greater burden of care work on women, which can reduce women’s leisure time relative to men. My colleagues, Claire Vermaak, Colette Muller...
Book Chapter
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– The top-end, labour markets, fiscal redistribution and the persistence of very high inequality
From the book:
Inequality in the Developing World
Working Paper
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– A view from below
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 September 2020 in the township of Khayelitsha, Cape...
Working Paper
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– Evidence from the 2016 retirement reform
In 2016, the South African government introduced a comprehensive reform to simplify and harmonize the pension system in order to incentivize pension savings and increase the fairness of the retirement system. Using administrative tax micro-data, we assess the impact of the 2016 reform and find that...
Working Paper
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– Firm-level evidence from administrative tax data
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 response to uncertainty reflect firms’ heterogeneity...
Agriculture and agro-processing value chains have been under pressure during the COVID-19 pandemic. This has been particularly marked where they remain underdeveloped, as is the case in South Africa and the rest of the region. Regulatory responses to the pandemic disrupted agriculture and agro...
Working Paper
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This paper aims to decompose the sources of growth in economies in the Southern African region’s Common Monetary Area and in the provinces of South Africa. Decomposition results for the Common Monetary Area reveal that the growth of aggregate and sectoral gross domestic product is driven by input...
Working Paper
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– A gender comparison
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 insights into market behaviour and physical and...
Working Paper
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– Macro-micro analysis
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 Social Accounting Matrix to estimate, compare, and...
Working Paper
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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 by Cecchetti and Rich (2001) based on Cecchetti...
Technical Note
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– CIT-IRP5 panel v4.0
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 foreign ownership. The dataset also has variables that...
Even though poverty and inequality have been of overriding concern in South Africa’s development policies and programmes since its democratization in 1994, measures of poverty, inequality, and related phenomena in the country do not show a clear improvement. In some important respects, they show...
The two primary features of a job are its wage and how long it lasts. Today, there is an extensive literature on wages in the developing world thanks to the expansion of national household survey data. However, far less work has been conducted on job duration in these countries, primarily due to the...
– Natural gas as a key
Plastics are universal and integrated into different sectors of the economy. Industrial policy requires countries to look at moving up the value chain and producing progressively more sophisticated products to contribute to improved economic development. The input materials that are used for...
– Promises and pitfalls of tradable services in Africa
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 services — business activities that can be exported or...
– The distribution of household wealth in South Africa
South Africa is, by most contemporary measures, the most unequal country in the world. Yet, relatively little attention has been given to country’s wealth inequality. It is crucial to accurately measure the concentration of wealth inequality over time, identify the root causes of the current...
Working Paper
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– Evidence from tax administrative data
This paper examines the relationship between monetary policy and wealth inequality in South Africa. We employed a unique database of tax administrative data which allowed us to account for individual heterogeneity. These tax data span from 2011 to 2017 and include over 3 million individual taxpayers...
Working Paper
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– A Markov-switching approach
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 sustainable fiscal policy. Furthermore, considering the...
Working Paper
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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 unsupervised and supervised machine learning algorithms...
Working Paper
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– The case of BRICS
As the world battles with the triple problems of social, economic, and environmental challenges, it has become important to focus both policy and research efforts on these. Therefore, this study examines the effect of wealth inequality on CO2 emissions in five emerging economies: Brazil, Russia...
Working Paper
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– The case of Zambia and South Africa
The successful use of special economic zones as economic tools for export-led industrial development in East Asia propelled a wave of similar initiatives across Africa. In Southern Africa, Zambia and South Africa instituted special economic zones in their respective legal and institutional...
Monetary policy affects the real economy through various channels, including the interest rate, exchange rate, credit, and asset price channels. The credit channel has recently received considerable attention. Small firms are more sensitive to changes in interest rates. Small firms which are...
Working Paper
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– Investigating the potential of spatial network effects in service delivery for reducing stunting in orphans
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 service delivery in reducing the orphan-stunting...
Working Paper
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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 model for South Africa to conduct our economic...
Working Paper
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Plastics are ubiquitous across the region and play an important role in multiple industries. Most plastic products are based on a value chain that is grounded in petroleum refining, posing an environmental challenge. Plastic manufacturing in South Africa suffers from the high cost of polymers as...
Working Paper
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– Firm-level evidence from South Africa
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 paper uses extant classifications of internationally...
Much work has been done on inequality in South Africa, but to date the literature that assesses the dynamic response of income or wealth distribution to economic policy actions is almost non-existent. This information gap is caused by data shortcomings that make it difficult to provide accurate...
– What kind of firms employ young people in South Africa?
According to South Africa’s National Development Plan Vision 2030, serious action needs to be taken to reduce poverty and encourage economic growth. One of the main challenges involves reducing the unemployment rates in South Africa, particularly among youth. In South Africa, young and large firms...
– The impact on equality in South Africa
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 affordability for the poor. An in-depth analysis of...
Working Paper
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– Is it meeting its intended objectives?
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 net exports to imports and by inflated downstream...
Working Paper
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– Diagnosing South Africa's anomalies in the shadow of racial discrimination
Inequality in South Africa is the enduring legacy of racial discrimination. We use a dynamic perspective to show the linkages between persistent effects of discrimination in the labour market and the efficacy of redistributive fiscal policy in reducing inequality. We present a machine-learning...
Working Paper
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– Economy-wide scenarios
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 previously carried out by workers. This can lead to labour...
– What are the challenges?
Diversifying the agricultural production in sub-Saharan Africa is important for the combat against poverty and climate change. In Malawi there are plans for legalizing the cultivation of industrial hemp, which would at best bring possibilities for Malawi and South Africa to complement each other in...
Special economic zones (SEZ) in Africa are generally regarded as underperforming relative to their peers in the rest of the world. To explain this underperformance and to support success in the future it is important to analyse the key features and what is lacking in the design of African special...
– Can foreign direct investment help South Africa increase the complexity of its exports?
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 and poverty is a pressing policy issue. The overall...
– A pathway to effective tax collection in South Africa
Many governments, particularly those in developing countries, have set an objective to improve tax revenue mobilization to offer more and better public services to their citizens. To develop effective revenue-raising strategies it is necessary to determine whether there is a tax revenue gap and gain...
Working Paper
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This paper documents the industry classification variables in the anonymized tax microdata available for research at the National Treasury Secure Data Facility in Pretoria. It discusses how the variables in the data are related to the raw records captured in various tax forms and outlines the...
Working Paper
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– Evidence from South Africa
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 driver of gender inequality: international trade...
Much of the research on the impact of fiscal policy shocks on macroeconomic outcomes (e.g., fiscal multipliers) uses reduced-form modelling approaches such as vector auto-regressions to obtain empirical results. In a recent study1, we used this approach to estimate fiscal multipliers for South...
Despite the frequent use of fiscal policy for stabilization purposes, there remains significant uncertainty regarding the impact of fiscal policy decisions on macroeconomic outcomes. This impact is quantified by calculating fiscal multipliers. A fiscal multiplier measures the impact of government’s...
Working Paper
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– South Africa’s exports of tradable urban services to the rest of Africa
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 planning, design, and governance are vital to...
Working Paper
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Much of the research on fiscal multipliers has used reduced form modelling approaches. While these models have been extended to include richer controls and identification approaches, it remains unclear whether shocks identified capture the true structural shocks. An alternative way to identify these...
Working Paper
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Despite the frequent use of fiscal policy for stabilization purposes and the important role fiscal activism has played over the last decade, the size of budgetary multipliers (i.e. the output response following an exogenous shock to fiscal policy) has been heatedly debated at the theoretical and...
Working Paper
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This paper aims at providing new evidence over the effect of conventional monetary policy shocks on wage inequality through the earnings heterogeneity channel under the inflation-targeting regime implemented in South Africa since 2000.The empirical contribution follows previous studies by...
Working Paper
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This paper reviews comparative approaches to key issues in economic regulation in four countries of the Southern African Development Community, and how this has been reflected in outcomes in terms of competition, prices, access, and innovation in telecommunications services. In this paper...
Working Paper
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Low levels of broadband penetration combined with poor quality of services present a challenge to growth and development in the Southern African Development Community (SADC). This paper performs a comparative analysis of the competitive dynamics of telecommunications markets in four SADC countries...
Working Paper
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– Evidence from South Africa using data from tax records
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 the short-term impact of strengthening employment...
Working Paper
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– Evidence from bunching at kink points of the South African income tax schedule
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 evidence of bunching among the self-employed but no...
Blog
– COVID-19 in South Africa
South Africa’s COVID-19 lockdown regulations are likely to have a devastating impact on the incomes of workers and their dependents. Already disadvantaged groups will suffer disproportionately from the adverse effects. Low-income earners performing jobs in precarious, informal sectors of the economy...
Blog
While growing up, I was troubled by the scale of the socioeconomic gap between the haves and the have-nots in the community around me. I saw cases where some individuals and households could afford education, quality healthcare, nice houses, nutritious food and good clothing, while others lived in...
Working Paper
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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 estimates produced by Statistics South Africa do not...
Working Paper
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– The cases of Botswana, Kenya, Tanzania, and Zimbabwe
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 Development Goals—gender equality, decent work...
Working Paper
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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 these data to correctly identify labour income for...
Working Paper
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– Is success influenced by design attributes?
Special economic zones (SEZs) in Africa are generally regarded as underperforming relative to their peers in the rest of the world. This study focuses on the design features of the SEZ in Africa that may help explain this underperformance. Literature was reviewed to identify the key design...
Working Paper
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The principal contribution of this paper is to investigate the relationship between policy uncertainty, caused by recent developments in international markets, and firms’ trade margins for the largest economy in Africa: South Africa. In particular, using a unique database on the population of...
Working Paper
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The purpose of this research is to investigate whether transport accessibility influences the employment duration of individuals in South Africa. The South African Revenue Service’s IRP5 administration datasets, which indicate employment duration and spatial location data (where workers reside and...
Working Paper
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– The case of South Africa
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 an emerging economy resemble those explored for...
Working Paper
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– Rapidly increasing top incomes amidst low national growth in South Africa
Despite South Africa’s need for inclusive economic growth, we find that the income trajectories of the rich continue to diverge from the rest of the income distribution. We combine household survey data and tax data (which, unlike household survey data, includes accurate data for the very rich) to...
Corporate taxation is at the heart of economic development, and cardiac failure looms if international tax reform is not made globally inclusive There is a close link between a country’s economic development and its capacity to collect tax revenue. Tax administrations in developing countries often...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Direct evidence using transaction data
This paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country. Using South African transaction-level customs data, the author directly tests for transfer price deviations from arm's-length pricing. It is found that multinational firms...
Working Paper
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The Employment Equity Act No. 55 of 1998 was introduced by the South African government to address the legacy of apartheid and ensure equitable representation of black people and women in the South African labour market. Although the impacts of the Act are highly controversial, its widespread...
Working Paper
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– Evidence from a large minimum wage increase in the agricultural sector using administrative tax data
This paper presents new evidence on the employment effects of a large increase in agricultural minimum wages in South Africa using anonymized tax data. We add to the minimum wage literature by differentiating employment effects resulting from the destruction of existing jobs and from the slower...
Working Paper
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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 entering a period of premature deindustrialization...
Working Paper
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Nowadays, tax depreciation allowances are used less as instruments of macroeconomic stabilization and more as long-term measures to stimulate investment. This paper tabulates the types of accelerated depreciation allowances in South Africa and calculates the magnitude of these benefits in addition...
Working Paper
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This paper estimates the distribution of personal wealth in South Africa by combining tax microdata, household surveys, and macroeconomic balance sheet statistics. We systematically compare estimates of the wealth distribution obtained by direct measurement of net worth, rescaling of reported wealth...
Working Paper
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– A top-down approach
A key objective of many governments is to improve tax revenue mobilization. One way to achieve this is by improving tax compliance. This requires accurate knowledge of the tax gap, i.e. the difference between what should be paid and what is actually paid. Until now, tax gaps have been primarily...
Background Note
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– The case of South Africa
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 Ramaphosa addressed the country, calling for measures to...
Blog
– Explaining income distributions with ‘decompositions’
The understanding of inequality requires the analysis of changes in income distributions across countries and over time as well as the identification of its drivers. To achieve this we use different statistical tools to identify the distributional patterns and summarize the results using inequality...
Working Paper
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– Evidence from South Africa
We study the relationship between product market competition and labour market outcomes in South Africa. We combine firm-level data from tax records with individual-level data from the labour force survey. We estimate markups across sectors, and derive a measure of employment concentration in high...
Working Paper
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This paper investigates the validity of household survey data published by Statistics South Africa since 1993 and later integrated into the Post-Apartheid Labour Market Series (PALMS).A series of statistical adjustments are proposed, compared, and applied to primary data with the purpose of...
Working Paper
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– Unpacking the distributional effects of medical expenditure considerations in South Africa
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 fundamental legal implications. The 2012 tax reforms...
Working Paper
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– New data and estimates for South Africa
The elasticity of taxable income is a key tax policy parameter that plays an important role in the formulation of tax and transfer policy. This paper extends work by Kemp (2019) by using a new panel of individual tax returns and the phenomenon of ‘bracket creep’ to produce updated estimates of the...
Working Paper
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– Evidence from apartheid and post-apartheid South Africa
Few studies exist on job duration in developing labour markets—an important omission both in our understanding of such markets and for the job duration literature, which is mainly based on developed-country case studies, which differ in structural ways. The main reason for this is likely data...
Working Paper
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Interest in industrial hemp has revived in the past 20 years. Malawi is considering legalizing the cultivation of industrial hemp as an alternative cash crop to tobacco with great potential.This study considers the potential and challenges of creating an industrial hemp value chain between South...
Working Paper
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– A decomposition analysis
There is evidence from developed countries that technical change affects not only the employment intensity of production, but also the occupational composition of employment. The use of artificial intelligence, automation, and robots has changed the skills composition of employment. A range of...
Blog
In 2016, we joined a project in South Africa working to make tax data available for research purposes. Tax authorities collect an enormous amount of data on companies and individuals, data that is useful for economics research and economic policy-making, and the potential to learn from such a large...
Working Paper
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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 important policy issue. Using administrative data...
Working Paper
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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 higher export shares in destination markets, and...
– Reducing the impact of global oil prices
Analysis of World Bank data ranging from 1990–2017 indicates that increases in global oil prices would have negative effects on the economic growth of SADC, especially Mozambique, Tanzania, Zambia, and Mauritius. Given the high reliance of Southern African countries on crude oil imports, barrel...
The success of an economy’s manufacturing sector is often critical to economic growth and development. As a major contributor to exports, site of innovation, adopter of international best practices, and engine of job creation, an internationally competitive manufacturing sector often drives output...
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 for raw materials, and the potential for adopting...
Working Paper
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– An emerging market perspective
This paper uses matched employer-employee data from South Africa to examine the extent to which technology transfers between firms through the hiring of workers. Allowing for differential spillovers based on observable technology differences between sending and receiving firms, we find strong...
Working Paper
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– Dead end or steppingstone?
Despite rapid economic growth in recent decades, informality remains a persistent phenomenon in the labour markets of many low- and middle-income countries. A key issue in this regard concerns the extent to which informality itself is a persistent state. Using panel data from Ghana, South Africa...
Working Paper
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– A mixed-methods investigation
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 qualitative case study integrating focus group...
New research provides the first direct evidence of tax-motivated transfer mispricing in a developing country. Using highly detailed firm-level customs data from the tax authority, the analysis calculates the difference between legitimate estimates of market prices (known as the arm’s-length price)...
Working Paper
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– Evidence from firm-level 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 factor productivity originating from...
Working Paper
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– The role of innovation and exports
This paper investigates the effect of innovation on employment growth at the firm level in South Africa. Innovation is typically associated with better export performance at the firm level due to productivity enhancements and new products. However, the link between innovation and employment is more...
– Are they persistently high-growth firms?
The analysis of firm growth has been a topic of consistent economic interest as a growing body of literature has lent support to the possibility that the majority of growth and new employment creation is the result of a small sub-sector of high-growth firms (HGFs). While this has been demonstrated...
– Can South African firms compete with Chinese imports?
China’s growing edge in export manufacturing has caused concern for low-income and middle-income countries seeking to develop robust manufacturing sectors. China’s recent transition from an exporter of lower-tech goods, such as garments, to more advanced products, such as components for high-tech...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Evidence from South African tax registers
Part of Journal Special Issue
Public economics and development action
Tax, and public-sector matters more generally, is high on the agenda of international development. This is clearly reflected in the Sustainable Development Goals (SDGs) approved by the United Nations General Assembly in September of 2015. SDG17 addresses the need for improving domestic resource...
Working Paper
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We examine the extent to which two of Africa’s leading gold mining economies, Ghana and Tanzania, have adopted transformative local procurement policies to enhance backward linkages from the minerals sector. We assess the impact that evolving legislation in the gold industry has had on...
Working Paper
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– An analysis of the labour market effects
In South Africa, the manufacturing sector—important for growth and employment creation—has shown declining growth, poor productivity performance, decreased labour demand, and increased imports of intermediate goods (offshoring activities). Offshoring influences jobs and wages differently depending...
– Impacts on economic development
Over the past 20 years, researchers have been looking at the economic lifecycle of individuals around the world using National Transfer Accounts (NTA) data. The focus of this research has been on understanding how societies produce, consume, share, and save resources across generations, how these...
Working Paper
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– A case study of the maize-milling machinery value chain in South Africa and Zambia
This working paper is the fourth in a series that forms part of the project ‘Southern Africa – Towards Inclusive Economic Development’, a three-year partnership between UNU-WIDER and the South African government aimed at generating a better understanding of regional value chains and supporting...
Working Paper
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– Chinese import penetration and the performances of manufacturing firms in South Africa
Using firm-level tax administrative data from 2010 to 2017, we study the impact of Chinese import penetration on the performances of manufacturing firms in South Africa, and whether firms investing in capabilities development are more resilient to such competitive pressure. Specifically, by...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– The complexity of household migration strategies in post-apartheid South Africa
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 areas to find employment, but a range of...
– Socioeconomic class and poverty in South Africa
South Africa is often cited as the most unequal economy in the world. Its experience of having to overcome both colonialism and apartheid makes it unique from the vantage of studies on socioeconomic class, economic mobility, and poverty — with household characteristics like race, gender, and...
– The case of value-added tax in South Africa
In a democratic system, taxation is a critical part of the social contract between the state and its citizens. The tax system can be used to help address the unacceptably high levels of poverty, inequality, and unemployment in South Africa. An increase in VAT from 14% to 15% caused a modest rise in...
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 leads to suboptimal allocation of resources. In South...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Examples from South Africa, Singapore and Bangladesh
Part of Journal Special Issue
Migration Governance and Policy in the Global South
Working Paper
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Supermarkets are strong catalysts to stimulate the growth and development of producers and suppliers of processed food and manufactured products in Southern Africa. This paper assesses the role of supermarkets and governments in developing supplier capabilities through supplier development...
Working Paper
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– What can be learnt from new administrative data?
The South African economy is generally understood to be characterised by high levels of product market concentration and high firm markups. This paper reviews the existing literature and discusses what can be learnt from new administrative firm-level panel data. I present new evidence on South...
Working Paper
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Examining the economy-wide consequences of South Africa following a similar trajectory of labour market polarization to the rest of the world requires an appropriate database for an economy-wide policy analysis framework. This paper describes how a 2015 South Africa social accounting matrix (SAM)...
Working Paper
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In recent decades, the impact of South African foreign direct investment in Africa has been captured by research and policy. This paper investigates linkages and spillover effects of South African foreign direct investment in Botswana and Kenya. The study uses primary data to investigate qualitative...
As the largest economy in sub-Saharan Africa, South Africa’s successes and failures spill over into the broader region. Today, as South Africans face high unemployment and a sluggish economy, policymakers are wrestling to create success through solutions that will quell rising public debt, overcome...
Working Paper
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– Investment, profitability, and leverage
Employing the difference-in-differences technique, this study examines the impact of the Employment Tax Incentive programme on a large sample of South African firms from 2011 to 2016. It finds that programme firms expanded investments by 4.8 per cent, and profits by 5.7 per cent. Consistent with the...
Income inequality is the result of complex processes with multiple interacting driving forces but understanding those drivers in emerging economies is particularly difficult because of data and analytical challenges. While most middle-income countries produce comprehensive household surveys these...
The many faces of inequality Measuring inequality isn’t as simple as it may seem. We know that since the 1970s global inequality has been falling in relative terms, but absolute inequality has been increasing over the same period. There are also substantial differences in trends across the different...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
Part of Journal Special Issue
Bioenergy in Southern Africa
– Progress on equality thwarted by slow growth and success of top earners
South Africa has the highest rate of measured inequality in the world. Often thought to be a legacy of the apartheid system, inequality in South Africa has stubbornly persisted. South Africa’s position as highest inequality country in the world has not changed Progressive taxation and social...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
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 sustained or significant desegregation. Occupations remain...
Working Paper
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Traditionally, analysts of the South African labour market have used household survey data to describe earnings and employment in the post-Apartheid period. More recently, administrative data from the South African Revenue Service has been made available, which allows for comparisons and an...
Working Paper
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– Manufacturing firms in South Africa
Misallocation of labour and capital can greatly reduce aggregate productivity. In this study, we use tax administrative data to examine the extent of resource misallocation in the South African context. In addition, we zoom in on how different government incentives affect the allocation (or...
Working Paper
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– An agenda
Understanding wealth inequality has unique significance in South Africa. The co-existence of extreme poverty and extreme wealth is starkly visible. Apartheid-era inequality has persisted despite more than 20 years of democracy. Much of the research on inequality has focused on inequality of income...
Working Paper
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This paper investigates whether Southern African Development Community countries that are vulnerable to changes in oil prices could instead substitute oil and petroleum products with biofuels and gas from within the region. A pooled mean group estimator was used to determine the impact of oil prices...
Working Paper
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We employ a micro-founded and stock-and-flow-consistent model to study the impact of a higher leverage ratio on the South African economy. The model provides a rich representation of institutional balance sheets. The relationship between bank capital, risk-taking behaviour, lending spreads, and...
Working Paper
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– Rent-sharing and monopsony in South Africa
Using administrative tax records from South Africa for the period 2011–14, I find that firm wage premia explain 25 per cent of the total wage variance, 60 per cent of the gender wage gap, and 40 per cent of the gap between workers in the middle and the bottom of the income distribution. Next, I...
Working Paper
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– Firm-level evidence from administrative tax data
Monetary policy is believed to have a disproportionate effect on firms, depending on their size. Financially constrained firms with limited access to capital markets are expected to be more sensitive to changes in interest rates; this is characteristic of small firms. This paper empirically tests...
Working Paper
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– Policy relevant research possibilities using South African tax data
This paper has three primary objectives. First, it provides a broad overview of the available South African data used to examine gender in the labour market, with specific reference to the South African Revenue Services (SARS) tax data which has recently been made available. Second, the paper...
Working Paper
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– Looking back with data
This paper provides a retrospective assessment of the effects of trade policies on South African manufacturing since the transition to democracy, examining the differences and commonalities in the views of economists in favour of and against an acceleration of trade liberalization. Data from the...
Working Paper
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This study investigates the effect of real exchange rate volatility on the distribution of income between labour and capital in South Africa. Both symmetric and asymmetric effects are considered. Using quarterly data for 1985:1–2018:3 and local linear projection, we find that the immediate response...
Working Paper
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– Evidence from South Africa
The paper examines the incidence and employment impacts of the Employment Tax Incentive, a South African wage subsidy system that is targeted at the employers of low-wage youth. The paper uses a triple differences strategy and survey and administrative data, covering the universe of South African...
Working Paper
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The availability of anonymized individual tax return data can contribute to a deeper understanding of the drivers behind the high levels of inequality and unemployment in South Africa. In the recent past, researchers have examined either payroll or personal income tax data. This paper explains the...
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– Lessons to be learned from ASEAN
There is general agreement at present that the Southern African Development Community needs to re-imagine itself and breathe new life into its somewhat moribund structure. The European Union is often presented as the textbook example to be followed by other regional associations—a rules-based...
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– Poverty dynamics and inequality in South Africa, 2008–2017
Longitudinal surveys can give insight into economic mobility, which allows us to understand how markers of (dis)advantage are consequential in determining material conditions in the present, and how these markers structure economic opportunity over time. In this paper we show that this dynamic...
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– Race-disaggregated National Transfer Accounts for South Africa, 2015
Differences in the economic lifecycle between countries at different levels of development suggest that there may be differences between sub-populations within countries, particularly where the sub-populations have different levels of income. Given stark inequalities by race in South Africa, this...
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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 narrowing of the gap at the bottom of the distribution...
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– Assessing the distributional impact of the recent increase in the VAT rate and options for redress through the benefits system
Using SAMOD, a tax-benefit microsimulation model for South Africa, this paper examines the joint distributional impact of the increase in the value-added tax (VAT) rate and increases in benefit amounts in 2018. Although poverty and inequality did not increase overall, the poorest still saw a...
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– The case for an allowance for corporate equity
The problem of debt bias can be tackled through either disincentivizing the use of debt financing or incentivizing the use of equity financing. Considering the South African context—in which many firms are highly leveraged and the marginal effective tax rates for using debt financing are...
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This framing paper has two main purposes. We first provide a brief survey of the economic literature on taxation in South Africa. Second, we attempt to offer some ideas about areas and topics on which more information is needed and which are therefore suitable topics for further research...
– A report from the stakeholder workshop - 15 November 2018, Pretoria, South Africa
I found myself in the third-floor conference rooms of a Pretoria hotel for a meeting with economists, researchers, and policymakers involved in the SA-TIED programme. We had gathered here to discuss research progress in SA-TIED for two of the six work streams: Public revenue mobilization and Turning...
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We synthesize the findings from several recent papers on South Africa’s very high income inequality. These papers use new datasets—including income tax data—and new empirical methods to investigate the drivers of household income and individual earnings inequality in South Africa. Increased returns...
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In this paper we explore the income data in two surveys that underpin a South African tax-benefit microsimulation model. The simulated taxes and benefits using each dataset are compared with each other and with administrative data for a common time point. We explore discrepancies between the...
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The first democratic elections in 1994 brought about the promise for equal opportunity and an overall improvement of living standards for the majority of the South African population. However, 20 years after the democratization of South Africa, levels of inequality remain stubbornly high. The...
From the book:
Industries without Smokestacks
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– Direct evidence using transaction data
This paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country. Using South African transaction-level customs data, I directly test for transfer price deviations from arm’s-length pricing. I find that multinational firms in South...
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South Africa exhibits extreme levels of income inequality and is ranked as one of the most unequal countries in the world. In order to measure these severe levels of inequality, it matters how we account for the different parts of the income distribution. Although the approach has gained...
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In this paper we identify some of the drivers of changes in the distribution of earnings and earnings inequality in the South African labour market between 2000 and 2014. Although the overall level of earnings inequality between 2000 and 2011 was high and relatively stable, there were nonetheless...
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– Assessment using administrative tax data
Through the use of administrative tax data, this study attempts to identify the characteristics of firms that employ relatively large numbers of young people. The policy objective of this exercise is to use these insights to inform policy and programming in the context of youth unemployment...
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This paper uses a recent household survey and the CEQ framework to revisit and extend previous research on the impact of fiscal policy on income redistribution, and poverty in South Africa. We find, in accordance with previous research, that direct taxes and cash transfers are overall progressive...
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The growth of firms has been shown to have a meaningful impact on the health of firms and the economy in general. As the body of literature dedicated to understanding high-growth firms has expanded, an interest in the persistence of growth has become even more relevant. This is because persistence...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
Part of Journal Special Issue
Regional Growth Opportunities
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
– Corporate strategies, investments and agro-industrial policies
Part of Journal Special Issue
Regional Growth Opportunities
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
Part of Journal Special Issue
Regional Growth Opportunities
Journal Special Issue
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
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 to develop, in conjunction with important research...
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The proposition that inflation expectations can be extracted as inflation predictions from the government bond yield curve has been tested, with partially positive results, using data from the United States and European countries. Despite the abundance of empirical studies of the proposition...
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In this paper, I show that occupations in South Africa are segregated and stratified not only by race, but also by gender. While some women (mostly black and Coloured) overwhelmingly fill low-paying jobs, others (mostly white and Indian/Asian but also Coloured) tend to fill higher-paying...
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– Evidence for South Africa using administrative data
Public debate on the temporary employment services, or labour broker, sector in South Africa has focused on temporary workers’ wages and benefits. Empirical research is limited: temporary employment services cannot be accurately identified in recent labour force surveys. In 2015, South Africa...
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This paper investigates whether a Taylor rule accurately describes the South African Reserve Bank’s reaction function in setting interest rates using quarterly data, covering the period since inflation targeting was formally adopted in 2000. The classic Taylor rule is modified to determine whether...
Journal Article
This peer-reviewed research is available free of charge. UNU-WIDER believes that research is a global public good and supports Open Access.
This paper applies recent developments in collective model estimation to elicit the allocation of resources in African families in South Africa. We use the 2010/11 South African Income and Expenditure Survey as it contains exclusive goods, i.e., goods consumed by specific household members, to be...
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– Measuring the returns to R&D
Improvements in productivity are necessary to effectively increase economic growth in the long term. The literature emphasizes a positive correlation between firm-level innovation and productivity gains. It is unsurprising, then, that policy makers and researchers widely acknowledge that innovation...
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– Examples from South Africa, Singapore, and Bangladesh
In this paper we consider four factors that shaped the development of migration policy intended to protect the rights of vulnerable migrant women. They are: the role players in the policy change process, the debates that shaped the policy change, the role that research played and the political...
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Since the start of sharp electricity tariff increases in 2008, South African household demand for electricity has not been significantly affected. However, the combination of economic realities and ongoing electricity tariff increases will eventually compel households to reduce their electricity...
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– The impact of rising electricity tariffs on large firms in South Africa
While much research has been done on the economic impacts of load-shedding in South Africa, fewer studies have focused on the effects of the rapidly rising electricity tariffs. The issue of tariff increases has now become even more critical, with technological developments making it easier and...
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– Simulating universal pensions in Ecuador, Ghana, Tanzania, and South Africa
We use four novel, cross-country comparable tax-benefit microsimulation models for Ecuador, Ghana, Tanzania, and South Africa to evaluate ex ante the expansion of a universal old-age pension in a static setting. Universal pensions would significantly reduce poverty and inequality in settings in...
Displaying 272 of 495 results