This paper explores the feasibility for utilizing a wage subsidy in South Africa. Whilst a wage s... more This paper explores the feasibility for utilizing a wage subsidy in South Africa. Whilst a wage subsidy is already in place in South Africa, it is fairly unsubstantial, and this paper investigates the prospect of expanding it. Design characteristics of wage subsidies are discussed, in the context of South Africa. The paper shows how a wage subsidy is currently being used in South Africa (the Employment Tax Incentive) and ventures to show how a wage subsidy can be constructed in future. The finding is that wage subsidies currently do little to reduce unemployment, especially with the low levels of subsidization such as what currently occurs in South Africa, but that subsidies would need to be considerably extended in order for there to be a determinable impact on unemployment. Some suggestions are made about targeting subsidies towards employment-intensive industries, and towards small firms.
As crude oil prices reach new highs, there is a renewed concern about how external shocks will af... more As crude oil prices reach new highs, there is a renewed concern about how external shocks will affect growth and poverty in developing countries and how this effect should be modeled and anticipated. The links between the two aspects—macroeconomics and poverty/income distribution—surely have become a major focus of economic research and modeling in recent years.1 However, the main challenge has been the reconciliation of poten-tially very detailed and large information sets from microeconometric modeling of individual or household behaviors about income and employ-ment opportunities with the more aggregative behavior in a macroeco-nomic model. A promising approach for researchers is to employ computable general equilibrium (CGE) modeling as a meso framework because CGE models generate from macroeconomic changes a set of consistent relative prices, wages, and profits at the sectoral level that provides the vital sources and changes of household incomes and expenditures for further an...
An analysis of issues shaping Africa’s economic future This document was produced by the Office o... more An analysis of issues shaping Africa’s economic future This document was produced by the Office of the Chief Economist for the Africa region u Sub-Saharan Africa’s growth will slow in 2015 amid falling commodity prices. u Weakening terms of trade present headwinds for the region’s commodity exporters; gains for importers. u The rise of new types of conflict and the potential for disease epidemics are risks to the region’s prospects.
remain strong, but growth is vulnerable to a sharp decline in commodity prices u The region’s pro... more remain strong, but growth is vulnerable to a sharp decline in commodity prices u The region’s progress on reducing poverty has been slow, hindered by high inequality u Faster reduction in poverty will require growth with equity
Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan A... more Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan Africa in 2017, easing pressure on weak policy frameworks. Output growth rebounded to an estimated 2.6 percent after decelerating to 1.5 percent in 2016 amid challenging external and domestic conditions. Notwithstanding the recent upturn in economic activity, growth remained well below its pre–financial crisis average of around 5 percent; moreover, per capita growth was negative for a second consecutive year. Important near and longer term vulnerabilities remain in many of the region's economies: eroded policy buffers constrain the scope for countries to formulate an adequate policy response to adverse shocks; public debt relative to gross domestic product (GDP) is rising, with implications for debt sustainability; employment opportunities severely lag the growing labor force, and livelihoods and economic fortunes are still tied to commodity price shocks and production disruptions, un...
This Africa's pulse newsletter includes the following headings: Sub-Saharan African countries... more This Africa's pulse newsletter includes the following headings: Sub-Saharan African countries continue to grow at a steady pace; the region's decade-long economic expansion appears sustainable; and for newly resource-rich countries, strong governance will be key to harnessing resource wealth for development
This paper explores the feasibility for utilizing a wage subsidy in South Africa. Whilst a wage s... more This paper explores the feasibility for utilizing a wage subsidy in South Africa. Whilst a wage subsidy is already in place in South Africa, it is fairly unsubstantial, and this paper investigates the prospect of expanding it. Design characteristics of wage subsidies are discussed, in the context of South Africa. The paper shows how a wage subsidy is currently being used in South Africa (the Employment Tax Incentive) and ventures to show how a wage subsidy can be constructed in future. The finding is that wage subsidies currently do little to reduce unemployment, especially with the low levels of subsidization such as what currently occurs in South Africa, but that subsidies would need to be considerably extended in order for there to be a determinable impact on unemployment. Some suggestions are made about targeting subsidies towards employment-intensive industries, and towards small firms.
As crude oil prices reach new highs, there is a renewed concern about how external shocks will af... more As crude oil prices reach new highs, there is a renewed concern about how external shocks will affect growth and poverty in developing countries and how this effect should be modeled and anticipated. The links between the two aspects—macroeconomics and poverty/income distribution—surely have become a major focus of economic research and modeling in recent years.1 However, the main challenge has been the reconciliation of poten-tially very detailed and large information sets from microeconometric modeling of individual or household behaviors about income and employ-ment opportunities with the more aggregative behavior in a macroeco-nomic model. A promising approach for researchers is to employ computable general equilibrium (CGE) modeling as a meso framework because CGE models generate from macroeconomic changes a set of consistent relative prices, wages, and profits at the sectoral level that provides the vital sources and changes of household incomes and expenditures for further an...
An analysis of issues shaping Africa’s economic future This document was produced by the Office o... more An analysis of issues shaping Africa’s economic future This document was produced by the Office of the Chief Economist for the Africa region u Sub-Saharan Africa’s growth will slow in 2015 amid falling commodity prices. u Weakening terms of trade present headwinds for the region’s commodity exporters; gains for importers. u The rise of new types of conflict and the potential for disease epidemics are risks to the region’s prospects.
remain strong, but growth is vulnerable to a sharp decline in commodity prices u The region’s pro... more remain strong, but growth is vulnerable to a sharp decline in commodity prices u The region’s progress on reducing poverty has been slow, hindered by high inequality u Faster reduction in poverty will require growth with equity
Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan A... more Favorable global economic conditions supported a turnaround in economic activity in Sub-Saharan Africa in 2017, easing pressure on weak policy frameworks. Output growth rebounded to an estimated 2.6 percent after decelerating to 1.5 percent in 2016 amid challenging external and domestic conditions. Notwithstanding the recent upturn in economic activity, growth remained well below its pre–financial crisis average of around 5 percent; moreover, per capita growth was negative for a second consecutive year. Important near and longer term vulnerabilities remain in many of the region's economies: eroded policy buffers constrain the scope for countries to formulate an adequate policy response to adverse shocks; public debt relative to gross domestic product (GDP) is rising, with implications for debt sustainability; employment opportunities severely lag the growing labor force, and livelihoods and economic fortunes are still tied to commodity price shocks and production disruptions, un...
This Africa's pulse newsletter includes the following headings: Sub-Saharan African countries... more This Africa's pulse newsletter includes the following headings: Sub-Saharan African countries continue to grow at a steady pace; the region's decade-long economic expansion appears sustainable; and for newly resource-rich countries, strong governance will be key to harnessing resource wealth for development
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