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Impact of special COVID-19 social relief of distress grants in South Africa: A CGE analysis

Author

Listed:
  • Jean Luc ERERO

    (South African Revenue Service, South Africa)

Abstract

This paper assesses the outcomes of the Special COVID-19 Social Relief of Distress Grants (SRDG) program. A gratuity of R350 ($26.5) per person and per month was granted to low-income households following a national lockdown on 26 March 2020, aimed at alleviating the spread of the COVID-19 pandemic. Although children and elderly grants are excluded from this program, the study focuses on cash transfer programs in terms of their role in increasing current consumption of poor households and enabling them to gain capitals. We assess the general equilibrium effects of the cash transfer through the usage of a static computable general equilibrium (CGE) model calibrated to South Africa's social accounting matrix (SAM) for 2015. Our simulation results indicate that the SRDG program improved the real incomes and consumption for all households. Despite the welfare gains, South Africa’s fiscal and macroeconomic indicators suggest that the program is likely better considered as an automatic stabilizer in fiscal and social policy planning rather than as another component of social protection.

Suggested Citation

  • Jean Luc ERERO, 2024. "Impact of special COVID-19 social relief of distress grants in South Africa: A CGE analysis," Turkish Economic Review, EconSciences Journals, vol. 11(1-2), pages 38-56, May.
    • Handle: RePEc:cvv:journ2:v:11:y:2024:i:1-2:p:38-56
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    References listed on IDEAS

    as
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    3. Michiru Kaneda & So Kubota & Satoshi Tanaka, 2021. "Who spent their COVID-19 stimulus payment? Evidence from personal finance software in Japan," The Japanese Economic Review, Springer, vol. 72(3), pages 409-437, July.
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    Keywords

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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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