Abstract:
A Computable General Equilibrium model is used to find the effects of a food voucher
scheme on the economy in South Africa. If firms consider the issuing of vouchers as increased
remuneration, they will hire fewer labourers. The higher labour cost increases the total cost
of production and lowers supply. Real Gross Domestic Product decreases and the economy
becomes worse off. However, depending on the size of the government's involvement in such a scheme as well as the tax policies that are used to fund it, a food voucher scheme could benefit the poor, and improve the distribution of wealth in the country.
