Working Paper
Effective corporate tax burden and firm size in South Africa
We investigate the relationship between the corporate income tax burden and firm size in South Africa using a panel dataset from companies’ tax returns. We find that medium-sized companies are experiencing the lowest effective tax rate, while the...
Working Paper
New data, new approaches and new evidence
The Republic of South Africa faces the imperative of escaping economic stagnation. This paper seeks to synthesize results from a series of research efforts, including but not limited to the work conducted under the UNU-WIDER project on ‘Regional...
Journal Special Issue
Regional Growth Opportunities
This issue contains seven articles addressing the major changes underway in the integration of economies in southern Africa. This special issue is based on the UNU-WIDER project 'Regional growth and development in Southern Africa'. This project aims...
Working Paper
Fragmenting the family?
The disruption of family life is one of the important legacies of South Africa’s colonial and apartheid history. Families were undermined by deliberate strategies implemented through the pass laws, forced removals, urban housing policy, and the...
Journal Special Issue
Firm level analysis using administrative record data
This special issue focuses on a collaborative effort between the National Treasury and the South African Revenue Service (SARS) to employ administrative record data from SARS for economic policy analysis. It contains six research articles plus a...
Blog
The richer your neighbours, the more you borrow – the case of South Africa
by
Shakeba Foster
April 2023
Research on how income inequality affects borrowing behaviour reignited after the 2008 global recession. One prevailing theory is that rising income...
Working Paper
Macro-financial implications of public debt in South Africa
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector...
Working Paper
Social distress and (some) relief
Up-to-date, nationally representative household income/expenditure data are crucial to estimating poverty during the COVID-19 pandemic and to policy-making more broadly, but South Africa lacks such data. We present new pandemic poverty estimates...
Working Paper
Employment transitions with high unemployment and a small informal sector
This paper examines employment transitions in the South African labour market. Using the Post-Apartheid Labour Market Series, it analyses flows between the formal sector, informal sector, and unemployment, paying specific attention to how these flows...
Journal Article
The livelihood impacts of COVID-19 in urban South Africa
This paper investigates the impact of the COVID-19 pandemic and related policy measures on livelihoods in urban South Africa. Using qualitative research methods, we analyse two rounds of semi-structured phone interviews, conducted between June and...
Working Paper
Nation building in post-conflict settings
How do states rebuild nations after a major conflict? Truth and Reconciliation Commissions (TRCs) have emerged as one of the most common interventions to achieve this objective. Despite their popularity, little is known about their efficacy to foster...
Working Paper
The effect of wage subsidies on job retention
Wage subsidies have served as a primary labour market policy used around the world to mitigate job losses in response to the COVID-19 pandemic. In South Africa, where unemployment is among the highest globally, the Temporary Employer–Employee Relief...
Working Paper
A policy for the jobless youth in South Africa
This paper uses survey and tax administrative data to analyse the effects of a sizeable employer-borne payroll tax credit for young, low-wage workers in South Africa. We find limited impact of the wage subsidy on employment of young, low-wage workers...
Working Paper
Determinants of corporate cash holdings in South Africa
Globally, corporate cash holdings have risen since the 1980s. In South Africa, some commentators have accused corporations of engaging in an ‘investment strike’, while others see corporate liquidity as a precaution against systemic uncertainty. We...
Working Paper
Structural transformation, inequality, and inclusive growth in South Africa
This paper evaluates structural change, inequality dynamics, and industrial policy in South Africa between 1960 and the present day. We find that South Africa experienced growth-enhancing structural transformation until the early 1970s, before...
Background Note
COVID-19 and socioeconomic impact in Africa
What has the government of South Africa done with respect to COVID-19 measures of mitigation and suppression? The first COVID-19 positive case was confirmed on 5 March 2020. Just ten days later, South Africa had 61 positive cases and President...
Working Paper
Wage polarization in a high-inequality emerging economy
Earnings growth in South Africa displayed a U-shaped pattern across the earnings percentiles between 2000 and 2015, resembling wage polarization in the industrialized world. We investigate whether the drivers of this example of wage polarization in...
Working Paper
Earnings in the South African Revenue Service IRP5 data
The IRP5 and IT3(a) tax data from the South African Revenue Service have been made available to researchers through a joint project between the South African Revenue Service, the National Treasury, and UNU-WIDER. In this paper, I explain how to use...
Working Paper
A comparative study of export processing zones in the wake of the Sustainable Development Goals
The objective of this research is to assess the extent to which export processing zones in Botswana, Kenya, Tanzania, and Zimbabwe integrate the Sustainable Development Goals in their implementation and operations. We focused on four Sustainable...
Research Brief
Spatial dynamics of firm productivity in South Africa
The design and implementation of industrial policy should be closely linked to spatial considerations. Firm output and productivity are often location-specific, with factors such as the availability of physical infrastructure, proximity to sources...
Working Paper
Tariffs, productivity, and resource misallocation
An often-neglected potential negative consequence of tariffs is the impact they may have on the misallocation of factor inputs. Trade protection can provide space for domestic firms to increase prices and mark-ups, allowing low-productivity firms to...
Working Paper
Simulation of options to replace the special COVID-19 Social Relief of Distress grant and close the poverty gap at the food poverty line
We use a fiscal incidence model based on the South African 2014/15 Living Conditions Survey to simulate the poverty reduction impacts of a selection of medium-to-long-term social grant options with the goal of replacing the existing special COVID-19...
Working Paper
Ethnicity is not public service destiny
Millions of South Africans in thousands of demonstrations have protested the unequal allocation of public services. Despite the African National Congress’s promise to reduce the disparities generated by apartheid, the level of public services remains...
Working Paper
The asymmetric impact of economic policy uncertainty on firm-level investment in South Africa
This paper uses firm-level data and a news-based measure of economic policy uncertainty to provide empirical evidence that economic policy uncertainty has a negative impact on firm-level investment in South Africa. Firms’ investment decisions in...
Blog
Technology and supermarket chains can help strengthen southern Africa’s food systems
by
Thando Vilakazi, Namhla Landani
February 2021
Agriculture and agro-processing value chains have been under pressure during the COVID-19 pandemic. This has been particularly marked where they...
Blog
Persistent gender roles in South Africa deprive women of leisure time
by
Priyanka Harrichurran
March 2021
In most countries, traditional gender roles within the household are still common due to the prevalence and persistence of patriarchal systems. These...
Working Paper
Analysis of the distributional effects of COVID-19 and state-led remedial measures in South Africa
This paper explores the impact of the first wave of the COVID-19 pandemic in South Africa on income poverty and inequality in South Africa. Using a static tax–benefit microsimulation model with input datasets that were adjusted to reflect people’s...
Working Paper
The impacts of public expenditure innovations on real exchange rate volatility in South Africa
This study investigates the impacts of public expenditure innovations on exchange rate volatility in South Africa using quarterly data for the period 1970–2019. To achieve this objective, a version of the vector autoregressive impulse response model...
Blog
Good intentions falling short – the case of pension-related tax expenditures in South Africa
by
Agustin Redonda
April 2021
Tax benefits to boost contributions into pension funds or pension-related tax expenditures (PTEs) are used widely by governments worldwide to address...
Blog
COVID-19 lays bare Cape Town’s social divide, deepens underlying inequalities
by
Simone Schotte, Rocco Zizzamia
April 2021
The COVID-19 pandemic delivered a devastating economic shock to livelihoods across the world. In Cape Town, it has been toughest on those who had just...
Working Paper
State-dependent fiscal multipliers and financial dynamics
The aim of this paper is to assess South Africa’s fiscal multiplier across different states of the economy, with a focus on the financial accelerator mechanism of fiscal policy shocks, by estimating impulse response functions from both linear and non...
Working Paper
Simulating personal income tax in South Africa using administrative data and survey data
In this paper we explore South Africa’s personal income tax system using two microsimulation models. The first, SAMOD, simulates personal income tax and social benefits using a dataset derived from the nationally representative National Income...
Background Note
Building tax data for research
Introduction: data for development Globally, one of the key factors associated with increasing use of data to inform policy-making has been the increased availability of new administrative data sources. In 2014, the National Treasury of South Africa...
Working Paper
Estimating employment responses to South Africa’s Employment Tax Incentive
We present new evidence on the effects of South Africa’s Employment Tax Incentive (ETI), a hiring and employment wage subsidy aimed at reducing youth unemployment. We show that attempts to estimate firm-level treatment effects via conditional...
Working Paper
The macroeconomic effect of fiscal policy in South Africa
This paper analyses the macroeconomic effect of legislated personal income tax changes in South Africa over the 1996–2019 period. We identify personal income tax shocks using a narrative approach and incorporate these shocks in a proxySVAR model. Our...
Working Paper
Spillovers from extractive industries
Extractive industries form an important part of the economy for many developing countries, but their impact on growth and welfare remains understudied. With global efforts to transition to net-zero carbon emissions in the coming decades...
Blog
From sub-Saharan Africa to Viet Nam and Ecuador, how one model is used to improve social protection
Are there enough tax payers to generate the revenue needed by governments to reduce poverty? How adequate are the social security arrangements that...
Working Paper
Macroeconomic risks after a decade of microeconomic turbulence
This study analyses the performance of macroeconomic policy in South Africa in 2007–2020 and outlines challenges for policy in the coming decade. After remarkable economic growth in 1997–07, South Africa’s progress slowed dramatically in 2009 with...
Journal Article
Analysis of the distributional effects of COVID-19 and state-led remedial measures in South Africa
This study explores the impact of the first wave of the COVID-19 pandemic in South Africa on income poverty and inequality in South Africa. Using a static tax-benefit microsimulation model with input datasets that were adjusted to reflect people’s...
Working Paper
Monetary policy in South Africa, 2007–21
This paper reviews South Africa’s monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve...
Technical Note
Exploring the quality of income data in two South African household surveys which underpin SAMOD
This note has set out several data processes that have been undertaken using the income data in dataset(s) that underpin SAMOD. Section 1 describes various data-cleaning steps that were undertaken when preparing the LCS 2014/15 as an underpinning...
Blog
Stunted growth, orphans, and access to sanitation services in South Africa
by
Grace Bridgman
July 2021
Stunted growth in early life has serious implications for cognitive development and is a well-established constraint to individual productivity and...
Working Paper
Gender bias and the intrahousehold distribution of resources
This paper applies recent developments in collective model estimation to elicit the household resource sharing rule, i.e. the amount of household resources accruing to fathers, mothers, and their children among African families in South Africa. We...
Working Paper
Occupational segregation by race in South Africa after apartheid
This paper investigates progress in reducing the high level of racial stratification of occupations after apartheid in South Africa. Empirical analysis, using census microdata and Labour Force Surveys, does not provide strong evidence of sustained or...
Blog
Employing young people in South Africa: What role has the Employment Tax Incentive played?
by
Itumeleng Makgetla
March 2017
South Africa has some of the highest rates of joblessness in the world and youth unemployment is particularly severe. Roughly two in five young South...
Working Paper
Defining high-growth firms in South Africa
Traditionally, much of the research on economic growth drivers has been focused on small and medium enterprises. In recent years the academic focus on small businesses has shifted to a particular group of firms that are interesting from an economic...
Working Paper
Exploring options to deepen and broaden the personal income tax base in South Africa
In this paper we explore options for augmenting South Africa’s personal income tax revenue using two microsimulation models: PITMOD simulates the personal income tax system and is underpinned by a dataset comprising a full extract of anonymized...
Blog
High wage inequality in South Africa – are employers to blame?
by
Shakeba Foster
January 2024
South Africa ranks as the world’s most unequal country by income. This is largely due to high wage inequality, given that wages are the main income...
Working Paper
Agglomeration and productivity in South Africa
Using comprehensive, anonymized tax administrative data for the 2008–14 period, we examine firm-level productivity in South Africa. Measures of firm-level productivity are included in a spatial autoregressive model that assesses spillovers from total...
Working Paper
Structural poverty dynamics in urban South Africa
This paper examines the extent and determinants of structural poverty dynamics in South Africa, focusing on the socio-economically disadvantaged urban African population. The quantitative analysis using panel data is triangulated with evidence from a...
Research Brief
The gender wage gap in post-apartheid South Africa
The World Bank reports that the world loses US$160 trillion in human capital wealth due to gender wage inequality every year. Inequality is not just an issue of fairness. It is also undesirable because it hampers poverty reduction strategies and...
Working Paper
Exchange rates and firm export performance in South Africa
This paper uses detailed firm transaction data on manufactured exports to analyse the dilution of the real exchange rate-export relationship in South Africa over the period 2010 to 2014. Our empirical results show that firms that are larger, have...
Working Paper
Turnin’ it up a notch: how spillovers from foreign direct investment boost the complexity of South Africa’s exports
Countries’ economic complexity, and the associated diversification and sophistication of their exports, is a key determinant of economic growth. Understanding how South African firms learn to export more sophisticated products is, therefore, an...