South Africa Can Cut Poverty Rates Through Basic Income Support, Research Shows
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📰 The quick summary: New economic modeling shows that a basic income support grant in South Africa can significantly reduce poverty and inequality, especially when targeting extremely poor and unemployed citizens.
📈 One key stat: Nearly 55% of South Africa’s population lived in poverty in 2023, highlighting the urgent need for effective poverty reduction measures.
💬 One key quote: “The study identifies which socio-economic groups would benefit the most from the grant, and sheds light on the impact of basic income support on the welfare and livelihoods of individuals and their households.”
1️⃣ The big picture: South Africa faces severe economic challenges with one of the world’s highest inequality rates and an unemployment rate of 33.5%. Researchers have explored the potential impact of implementing a basic income support grant to address these issues. Their economic modeling examined three scenarios: providing grants to all working-age adults, only to the unemployed, or specifically to unemployed individuals in extremely poor households. The results show that such a grant, particularly when well-targeted, could significantly reduce both poverty rates and income inequality across the country.
2️⃣ Why is this good news: The research demonstrates that basic income support grants effectively reduce poverty and inequality in South Africa. When targeting the extremely poor and unemployed, both poverty headcount and the poverty gap decrease substantially. Better targeting makes the support more progressive and prevents benefits from going to non-poor recipients. The approach builds on existing successful social programs in South Africa and provides policymakers with concrete evidence for expanding social safety nets. Even amid limited public resources, the government can significantly improve welfare by focusing aid on the most vulnerable populations.
3️⃣ What’s next: Government officials must now determine the most effective targeting criteria to identify those most in need. Policymakers need to weigh the higher administrative costs of targeted approaches against the greater poverty reduction potential of universal programs. The research brings the debate on expanding existing social grants back to the forefront of social policy discussions in South Africa.
Read the full story here: The Conversation – A basic income support grant can address extreme poverty and inequality in South Africa – economic model shows how
