The Social and Economic Impact of South Africa’s Social Security System

Social grants in South Africa play a critical role in reducing poverty and promoting social development. This study evaluates the social and economic impact of State Old Age Pensions (SOAP), Disability Grants (DG), Child Support Grants (CSG), Care Dependency Grants (CDG), Foster Care Grants (FCG) and Grants-in-Aid (GIA). The analysis evaluates the role of social assistance in reducing poverty and promoting household development, examining effects on health, education, housing and vital services. In addition, the study assesses the impact of social grants on labour market participation and labour productivity, providing an analysis of both the supply and demand sides of the labour market. The study also quantifies the macro-economic impact of social assistance grants, evaluating their impact on savings, consumption and the composition of aggregate demand. Most of the statistical analysis focuses on the CSG, SOAP and DG since sample sizes are sufficiently large for these grants to support significant inferences.