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


  • Nicholas M. Odhiambo

    () (University of South Africa (UNISA))


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.

Suggested Citation

  • Nicholas M. Odhiambo, 2011. "Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect," Journal of Income Distribution, Journal of Income Distribution, vol. 20(1), pages 49-62, March.
  • Handle: RePEc:jid:journl:y:2011:v:20:i:1:p:49-62

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    5. Nicholas Odhiambo, 2015. "Government Expenditure and Economic Growth in South Africa: an Empirical Investigation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(3), pages 393-406, September.
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    8. Asongu, Simplice A. & Odhiambo, Nicholas M., 2017. "Mobile banking usage, quality of growth, inequality and poverty in developing countries," Working Papers 23396, University of South Africa, Department of Economics.
    9. Asongu, Simplice & Asongu, Ndemaze, 2017. "Comparative Determinants of Quality of Growth in Developing Countries," MPRA Paper 80650, University Library of Munich, Germany.
    10. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
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    13. 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.

    More about this item


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

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs


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