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

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

Politique éducative et marché du travail en Afrique du Sud. Une analyse en équilibre général calculable dynamique

Cet article analyse l’impact d’une augmentation des dépenses publiques en éducation sur la performance du système éducatif sud africain et ses conséquences sur le marché du travail en utilisant un Modèle d’Équilibre Général Calculable (MEGC) en dynamique séquentielle. Le système éducatif sud africain porte les stigmates de l’Apartheid et une intervention publique plus accentuée est l’un des moyens envisagés pour corriger les inégalités héritées de l’ancien régime politique. Nos résultats montrent une amélioration des performances des étudiants et des effets positifs à court terme sur l’économie. À long terme, la population sud africaine, et en particulier les African, devient plus qualifiée, mais l’économie ne créant pas suffisamment d’emplois, une partie de ces nouveaux qualifiés se retrouve au chômage.Modèle d'équilibre général calculable, éducation, Afrique du Sud

The Impact of the International Economic Crisis in South Africa

A dynamic computable general equilibrium model based on the PEP standard model developed by Decaluwé et al. (2009) is used to evaluate the impacts of the international crisis on the South African economy. However, we have changed some assumptions in order to better represent South African specificities. A major innovation in this regard is the modelling of unemployment and the influence of labour unions on the labour market. Two scenarios encompassing a severe and moderate recession are run. The effects of the crisis on the economy are really quite harsh, even in the moderate recession scenario, both in the short run and the long run. Indeed, the decrease of world prices combined with the drop of world demand lead to a decrease in production for many sectors with consequent laying off of workers. The impact on institutions is also worrying: agents see their income as well as their savings decreasing. The huge drop in firms’ savings has a dire impact on total investment while the huge negative impact on government accounts of protracted slow global growth imply tight public budgets for some time to come. Thus, some gains made by the government prior to the crisis may have been reversed by the economic crisis. It is apparent from the results that the impact of the crisis will drag into the long run with the situation still below what it would have been in the absence of a crisis until 2015.Dynamic Computable General Equilibrium, Economic Crisis, South Africa

The Impact of the International Economic Crisis in South Africa

A dynamic computable general equilibrium model based on the PEP standard model developed by Decaluwé et al. (2009) is used to evaluate the impacts of the international crisis on the South African economy. However, we have changed some assumptions in order to better represent South African specificities. A major innovation in this regard is the modelling of unemployment and the influence of labour unions on the labour market. Two scenarios encompassing a severe and moderate recession are run. The effects of the crisis on the economy are really quite harsh, even in the moderate recession scenario, both in the short run and the long run. Indeed, the decrease of world prices combined with the drop of world demand lead to a decrease in production for many sectors with consequent laying off of workers. The impact on institutions is also worrying: agents see their income as well as their savings decreasing. The huge drop in firms’ savings has a dire impact on total investment while the huge negative impact on government accounts of protracted slow global growth imply tight public budgets for some time to come. Thus, some gains made by the government prior to the crisis may have been reversed by the economic crisis. It is apparent from the results that the impact of the crisis will drag into the long run with the situation still below what it would have been in the absence of a crisis until 2015

The impact of the international economic crisis on child poverty in South Africa

This paper reports on a study to provide insights into the magnitude of the shocks associated with the recent global economic crisis in macroeconomic terms in South Africa, the country’s capacity to withstand or cushion these shocks, and the extent of fragility in terms of poverty levels and child wellbeing. The analysis combines macro-economic and micro-economic tools to assess the extent of the crisis’ impact on the country. The study finds that the poverty headcount ratio increases little in the moderate crisis scenario, but substantially under the severe scenario. However, under both scenarios there is a relatively successful return to close to the business as usual trend. It is important to note though that under both scenarios, more poverty sensitive measures (the poverty gap ratio and the poverty severity ratio) decline more, and remain in negative territory longer, showing that the major impact of the crisis is on the poorest, and that this impact is most difficult to overcome.Economic crisis, Computable general equilibrium, Forecasting and simulation, Almost ideal demand system, Child poverty measurement, South Africa

The economic impacts of climate change on women in South Africa

International audienceIn developing countries, climate change impacts women more than men. Women have fewer resilience capacities and less economic opportunity. At the same time, women are essential as economic actors. In this paper, we analyse the economic impacts of climate change on women in South Africa. Here, gender inequality is high and likely to increase because of climate change. At the same time, women who suffer more from climate change impacts are highly important for economic growth. Using a computable general equilibrium model, we analyse how climate change impacts economic growth and women through different economic shocks and channels. By linking a microeconomic simulation to the macroeconomic framework, we analyse the impact of climate change on female-headed households. The results show that the climate shock negatively impacts productivity, labour demand and economic growth. These negative impacts translate to households by increasing prices and decreasing purchasing power. The impacts on poverty are stronger for female-headed households than for maleheaded households. Thus, policies need to address the problem of climate change, widening the gender gaps between men and women, not only under pro-poor and pro-gender objectives but also under pro-growth objectives

Modelling Energy Futures: A CGE framework for investigating investment in renewable energy applied to the EU electricity sector

The paper addresses the issue of introducing renewable electricity production into a CGE framework. This involves introducing an investment function that considers the relationship between two industries that produce the same commodity. This includes the possibility that a small sector (renewable electricity production) may grow more rapidly than would occur under standard model assumptions. Alternative functional forms for the investment functions are proposed. To analyse these functions, the paper uses the PEP-1-t model, with Europe-27 represented as a single region and the rest of the world exogenous. Each function is introduced into the model code, and tested through a simple simulation (subsidising the purchase of capital equipment). Comparing the functional forms, the paper suggests how improvements can be made to the standard model in cases where there is the potential for a transition between technologies (such as from conventionals to renewables in electricity production). The paper contends that the split in investment between two such industries should be dependent on the relative rental rates. Furthermore, it is argued that this relationship is best represented by a sigmoid curve, such as the logistic