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Does South African Affirmative Action Policy Reduce Poverty? a CGE Analysis


  • Hélène Maisonnave
  • Bernard Decaluwé
  • Margaret Chitiga


This paper presents a computable general equilibrium model (CGEM) able to measure the impacts of the affirmative action policy set up in South Africa. In order to decrease inequalities inherited from the former regime, the government encourages firms to employ Historically Disadvantaged Persons (HDP). Through this study, we evaluate the impact of this policy on employment, poverty and inequality. To evaluate impacts on poverty and inequality, we use a CGE Top Down approach. The paper analyses two scenarios; the first one deals with the impact of affirmative action on skilled jobs. The second scenario adds to the previous by including semi skilled workers in the simulation. Both of these scenarios show a deep decrease in unemployment as well as a fall of poverty for each population groups.

Suggested Citation

  • Hélène Maisonnave & Bernard Decaluwé & Margaret Chitiga, 2009. "Does South African Affirmative Action Policy Reduce Poverty? a CGE Analysis," Cahiers de recherche 0936, CIRPEE.
  • Handle: RePEc:lvl:lacicr:0936

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    References listed on IDEAS

    1. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, July.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. N. Hérault, 2006. "Building And Linking A Microsimulation Model To A Cge Model For South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 74(1), pages 34-58, March.
    4. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
    5. Rulof Burger & Ingrid Woolard, 2005. "The State of the Labour Market in South Africa after the First Decade of Democracy," SALDRU/CSSR Working Papers 133, Southern Africa Labour and Development Research Unit, University of Cape Town.
    6. Fofana, Ismaél & Chitiga, Margaret & Mabugu, Ramos, 2009. "Oil prices and the South African economy: A macro-meso-micro analysis," Energy Policy, Elsevier, vol. 37(12), pages 5509-5518, December.
    7. Rulof Burger & Rachel Jafta, 2006. "Returns to Race: Labour Market Discrimination in Post-Apartheid South Africa," Working Papers 04/2006, Stellenbosch University, Department of Economics.
    8. McDonald, Scott & van Schoor, Melt, 2005. "A Computable General Equilibrium (CGE) Analysis of the Impact of an Oil Price Increase in South Africa," Working Paper Series 15633, PROVIDE Project.
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    Cited by:

    1. Ngwenya, Mthunzi A. & Paas, Leonard J., 2012. "Lifecycle effects on consumer financial product portfolios in South Africa: An exploratory analysis of four ethnic groups," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 8-18.
    2. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.

    More about this item


    Computable General Equilibrium Model; Top Down Analysis; South Africa; Poverty; Inequality; Labor Market;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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