WP13/2010

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

Stellenbosch Working Paper Series No. WP13/2010

Author(s): Margaret Chitiga, Bernard Decaluwé, Ramos Mabugu, Hélène Maisonnave, Véronique Robichaud, Debra Shepherd, Servaas van der Berg, Dieter von Fintel

JEL Classification: C31, C68, D31, E37, G01, I32

Keywords: Economic crisis, Computable general equilibrium, Forecasting and simulation, Almost ideal demand system, Child poverty measurement, South Africa

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Abstract:

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.