Reforming grants to tackle child poverty : an integrated macro-micro approach

Show simple item record Tiberti, Luca Maisonnave, Helene Chitiga-Mabugu, Margaret Mabugu, Ramos 2018-09-28T12:02:16Z 2018-12
dc.description.abstract Social grant schemes have become an important component of many developing countries’ inclusive growth strategies with governments increasingly investing in large-scale cash transfer programs. South Africa’s Child Support Grant (CSG) is one of the largest cash transfer systems in Africa. However, child poverty remains high in the country, leading to calls to expand the CSG. Government faces resource scarcity and therefore needs to create fiscal space to set up such a reform. This paper evaluates the economy-wide impact of the CSG on the economy using a recursive bottom-up/top-down CGE-micro simulation approach. This allows the estimation of the potential effects of a 20% increase in the grant on households’ welfare, the economy, as well as on the fiscal constraint. This reform is evaluated under three fiscal scenarios to take into account the fiscal stress the country is currently experiencing. We find that the reform brings some positive impacts at the macro level, and a decrease in poverty for the whole population as well as for children. The direct effect brought by the CSG increase represents the largest contribution to poverty reduction, but the indirect (general equilibrium) effects globally reduce the positive poverty effects engendered by the CSG. Some interesting heterogeneous effects are also found, with the proposed reform being progressive and the richest percentiles showing a (small) deterioration due to the decrease in wage revenues. However, the overall poverty and inequality effects are small and unlikely to be robust. The paper’s results can assist South Africa, and indeed other African countries, calling for increased coverage of grants as well as exploring universal coverage. Further, the use of the integrated macro-micro simulation methodology is a major contribution of this paper. en_ZA
dc.description.department School of Public Management and Administration (SPMA) en_ZA
dc.description.embargo 2019-12-01
dc.description.librarian hj2018 en_ZA
dc.description.sponsorship Luca Tiberti acknowledges the financial support from the Partnership for Economic Policy (PEP), with funding from the Department for International Development (DfID) of the United Kingdom (or UK Aid), and the Government of Canada through the International Development Research Center (IDRC). en_ZA
dc.description.uri en_ZA
dc.identifier.citation Tiberti, L., Maisonnave, H., Chitiga, M. et al. 2018, 'Reforming grants to tackle child poverty : an integrated macro-micro approach', World Development, vol. 112, pp. 272-281. en_ZA
dc.identifier.issn 0305-750X
dc.identifier.other 10.1016/j.worlddev.2018.08.023
dc.language.iso en en_ZA
dc.publisher Elsevier en_ZA
dc.rights © 2018 Elsevier Ltd. All rights reserved. Notice : this is the author’s version of a work that was accepted for publication in World Development. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. A definitive version was subsequently published in World Development, vol. 112, pp. 272-281, 2018. doi : 10.1016/j.worlddev.2018.08.023. en_ZA
dc.subject South Africa (SA) en_ZA
dc.subject Poverty en_ZA
dc.subject Micro-simulation en_ZA
dc.subject Computable general equilibrium (CGE) en_ZA
dc.subject Child support grant (CSG) en_ZA
dc.title Reforming grants to tackle child poverty : an integrated macro-micro approach en_ZA
dc.type Postprint Article en_ZA

Files in this item

This item appears in the following Collection(s)

Show simple item record