Policy Options to Leverage the System of Social Grants for Improved Access to Economic Opportunity

by ALTMAN, M. & BOYCE, G, 2008
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

The distribution of social grants in South Africa expanded considerably between 2001 and 2007. However, in a context of high unemployment, there is concern that unemployed household members depend on grants that are meant to target children, the aged or disabled. Thus grants are spread thinly, dramatically reducing their contribution to the intended beneficiaries. Moreover, there have been concerns that grants may disincentives some adults from searching for work. Finally, there is concern about the pressure the grants put on the fiscus. In this light, the Department of Social Development commissioned the Human Sciences Research Council to consider how beneficiary households might be more closely linked to economic opportunity. Altman and Boyce identify possible policy options to increase economic participation among social grant beneficiary households. They provide an overview of the characteristics of beneficiary households, including the presence of labour market participants and their current link to economic activity. The report then considers possible instruments that could complement the system of grants, and their application to policy solutions that could enhance economic participation