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| Title | Wage subsidies to combat unemployment and poverty |
| Subtitle | Assessing South Africa's options |
| Author |
Burns, Justine Edwards, Lawrence Pauw, Karl |
| ORCID | http://orcid.org/0000-0002-5104-173X Pauw, Karl |
| Year | 2010 |
| Abstract | Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this country's massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africa's particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economy's employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth. |
| Series Name | IFPRI Discussion Paper |
| Series Number | 969 |
| Publisher | International Food Policy Research Institute (IFPRI) |
| Place of publication | Washington, D.C. |
| Language | English |
| Record Type | Discussion paper |
| Peer Reviewed - PR or Non-PR | Non-PR |
| Subject - country location |
SOUTH AFRICA AFRICA |
| Subject - keywords |
wage subsidies Unemployment Computable General Equilibrium (CGE) microsimulation modeling Developing countries macro-micro analysis economic growth labor costs employment absorption capacity |
| JEL Descriptors | C68 Computable General Equilibrium Models |
| IFPRI Descriptors |
IFPRI1 GRP32 |
| IFPRI Division | DSGD |
| Access Rights | Open Access |
| Display Notes | Effective January 2007, the Discussion Paper series within each division and the Director General's Office of IFPRI were merged into one IFPRI-wide Discussion Paper series. The new series begins with number 00689, reflecting the prior publication of 688 discussion papers within the dispersed series. The earlier series are available on IFPRI's website at http://www.ifpri.org/publications/results/taxonomy%3A468. IFPRI Discussion Papers contain preliminary material and research results. They have not been subject to formal external reviews managed by IFPRI's Publications Review Committee but have been reviewed by at least one internal and/or external reviewer. They are circulated in order to stimulate discussion and critical comment. |
| LOC call number | IFPRIDP00969 |
| Physical description | 27 pages |
| IFPRI Web link | http://www.ifpri.org/publication/wage-subsidies-combat-unemployment-and-poverty |
| RePEc Downloads | https://ideas.repec.org/p/fpr/ifprid/969.html |
| Requests | mailto:ifpri-library@cgiar.org |
| CONTENTdm file name | 1166.cpd |
| Date cataloged | 2017-08-03 |
| Date modified | 2017-08-03 |
| OCLC number | 778453247 |
| CONTENTdm number | 1165 |
Description
| Title | ifpridp00969 35 |
| Access Rights | Open Access |
| CONTENTdm file name | 1164.pdfpage |
| Date cataloged | 2017-08-03 |
| Date modified | 2017-08-03 |
| CONTENTdm number | 1163 |
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