Social grants are working: study
David Masango
14 December 2004
South Africa's social assistance programme is helping to reduce poverty, contributing to social cohesion and having a positive impact on the economic opportunities of households.
That's according to new research conducted by the Economic Policy Research Institute on behalf of the Department of Social Development.
The provision of social grants is the government's biggest poverty relief programme, paying out in the region of R50-billion per annum to over nine million South Africans.
These include old age pensions and grants for child support, disability, care dependency and foster care.
According to the research report, "The Social and Economic Impact of South Africa's Social Security System", a 10% increase in the take-up of old age pensions reduces the poverty gap by 3.2%, while full take-up reduces the poverty gap by 6.2%.
The greatest poverty-reducing potential, the report finds, lies with the progressive extension of
the child support grant to 14 years of age, which would yield a 57% poverty gap reduction.
The study also found that the provision of grants contributes to an increase in the number of children enrolling in schools, while living in a household that receives grants is correlated with a higher success rate in finding employment.
At the macro-economic level, the social grants programme tends to increase domestic employment while promoting a more equal distribution of wealth.
Addressing reporters at the release of the findings in Pretoria on Friday, Social Development Minister Zola Skweyiya said the study was relevant to government's three-pronged development strategy, which involved encouraging growth and development in the "first economy" and increasing its possibility to create jobs; implementing a programme to address the challenges of the "second economy"; and building a social security net to alleviate poverty.
The report evaluates the role of social
grants in reducing poverty and promoting household development, as well as examining their effects on health, education, housing and other social services.
The study also assesses the impact of social grants on labour market participation and labour productivity, thus providing an analysis that speaks to both the supply and demand sides of the labour market.
It also quantifies the macro-economic impact of social assistance grants, evaluating their impact on savings, consumption and the composition of aggregate demand.
Source: BuaNews
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