Assessing the impact of social income grants on inequality and economic growth in South Africa
| dc.contributor.advisor | Gossel, Sean | |
| dc.contributor.author | Senabe, Thato | |
| dc.date.accessioned | 2026-07-21T10:56:23Z | |
| dc.date.available | 2026-07-21T10:56:23Z | |
| dc.date.issued | 2026 | |
| dc.date.updated | 2026-07-21T10:54:51Z | |
| dc.description.abstract | Researchers and policymakers have long debated the relationship between social grants and economic growth, and social grants and income inequality, alongside the interplay among these three factors. This study thus used a Vector Error Correction (VEC) model to evaluate these relationships in South Africa from 2002 to 2023. The VECM results find a positive long-term relationship between social grants and economic growth, but a negative long-term relationship between social grants, income inequality, and economic growth. The Block Granger causality results, however, find no significant causal associations between economic growth and income inequality. Moreover, the variance decomposition analysis reveals that shocks to GDP growth primarily affect GDP growth itself, while shocks to social grant growth account for a small but increasing portion of the variation in GDP growth over time. The impulse response analysis reveals that a shock to social grants has a significant, positive, and long-lasting impact on GDP growth. The causality results indicate a positive long-term relationship between social grants and economic growth, and a negative long-term relationship between social grants and inequality. The policy implications of these results are that South African policymakers should maintain social grants as a policy intervention to ensure continued inequality mitigation and/or reduction over time, increase government expenditure in key, labour-intensive industries to stimulate growth given its statistical significance, and consider the establishment of an expanded social grant/cash transfer framework, reminiscent of Brazil's Bolsa Familia programme, which will facilitate inequality reduction/mitigation and promote more equitable economic growth in the long term. | |
| dc.identifier.apacitation | Senabe, T. (2026). <i>Assessing the impact of social income grants on inequality and economic growth in South Africa</i>. (). University of Cape Town ,Faculty of Commerce ,Graduate School of Business (GSB). Retrieved from http://hdl.handle.net/11427/43627 | en_ZA |
| dc.identifier.chicagocitation | Senabe, Thato. <i>"Assessing the impact of social income grants on inequality and economic growth in South Africa."</i> ., University of Cape Town ,Faculty of Commerce ,Graduate School of Business (GSB), 2026. http://hdl.handle.net/11427/43627 | en_ZA |
| dc.identifier.citation | Senabe, T. 2026. Assessing the impact of social income grants on inequality and economic growth in South Africa. . University of Cape Town ,Faculty of Commerce ,Graduate School of Business (GSB). http://hdl.handle.net/11427/43627 | en_ZA |
| dc.identifier.ris | TY - Thesis / Dissertation AU - Senabe, Thato AB - Researchers and policymakers have long debated the relationship between social grants and economic growth, and social grants and income inequality, alongside the interplay among these three factors. This study thus used a Vector Error Correction (VEC) model to evaluate these relationships in South Africa from 2002 to 2023. The VECM results find a positive long-term relationship between social grants and economic growth, but a negative long-term relationship between social grants, income inequality, and economic growth. The Block Granger causality results, however, find no significant causal associations between economic growth and income inequality. Moreover, the variance decomposition analysis reveals that shocks to GDP growth primarily affect GDP growth itself, while shocks to social grant growth account for a small but increasing portion of the variation in GDP growth over time. The impulse response analysis reveals that a shock to social grants has a significant, positive, and long-lasting impact on GDP growth. The causality results indicate a positive long-term relationship between social grants and economic growth, and a negative long-term relationship between social grants and inequality. The policy implications of these results are that South African policymakers should maintain social grants as a policy intervention to ensure continued inequality mitigation and/or reduction over time, increase government expenditure in key, labour-intensive industries to stimulate growth given its statistical significance, and consider the establishment of an expanded social grant/cash transfer framework, reminiscent of Brazil's Bolsa Familia programme, which will facilitate inequality reduction/mitigation and promote more equitable economic growth in the long term. DA - 2026 DB - OpenUCT DP - University of Cape Town KW - social income grants KW - inequality KW - economic growth LK - https://open.uct.ac.za PB - University of Cape Town PY - 2026 T1 - Assessing the impact of social income grants on inequality and economic growth in South Africa TI - Assessing the impact of social income grants on inequality and economic growth in South Africa UR - http://hdl.handle.net/11427/43627 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/43627 | |
| dc.identifier.vancouvercitation | Senabe T. Assessing the impact of social income grants on inequality and economic growth in South Africa. []. University of Cape Town ,Faculty of Commerce ,Graduate School of Business (GSB), 2026 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/43627 | en_ZA |
| dc.language.iso | en | |
| dc.language.rfc3066 | eng | |
| dc.publisher.department | Graduate School of Business (GSB) | |
| dc.publisher.faculty | Faculty of Commerce | |
| dc.publisher.institution | University of Cape Town | |
| dc.subject | social income grants | |
| dc.subject | inequality | |
| dc.subject | economic growth | |
| dc.title | Assessing the impact of social income grants on inequality and economic growth in South Africa | |
| dc.type | Thesis / Dissertation | |
| dc.type.qualificationlevel | Masters | |
| dc.type.qualificationlevel | MCom |