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Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect

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  • Nicholas M. Odhiambo

    ()
    (University of South Africa (UNISA))

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    Abstract

    In this article we examine the dynamic causal relationship between economic growth, employment, and poverty reduction in South Africa – using the Auto-Regressive Distributed Lag (ARDL) bounds testing procedure. The study attempts to answer one critical question: does economic growth in South Africa trickle down to the poor through job creation? The study uses two proxies to measure the incidence of poverty in South Africa, namely household consumption per capita and infant mortality. The empirical results of the study fail to support the trickle-down effect between economic growth and poverty reduction in South Africa. Moreover, the results show that there is no causal relationship between economic growth and poverty reduction in either direction. The results apply irrespective of whether the poverty level is measured by the real per-capita consumption or by the infant mortality rate.

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    Bibliographic Info

    Article provided by Journal of Income Distribution in its journal Journal of Income Distribution.

    Volume (Year): 20 (2011)
    Issue (Month): 1 (March)
    Pages: 49-62

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    Handle: RePEc:jid:journl:y:2011:v:20:i:1:p:49-62

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    Keywords: Africa; South Africa; employment; poverty reduction; economic growth;

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    Cited by:
    1. Polat, Ali & Shahbaz, Muhammad & Ur Rehman, Ijaz & Satti, Saqlain Latif, 2013. "Revisiting Linkages between Financial Development, Trade Openness and Economic Growth in South Africa: Fresh Evidence from Combined Cointegration Test," MPRA Paper 51724, University Library of Munich, Germany, revised 25 Nov 2013.

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