State of the Nation  2024

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Stimulus effects Of a large public Employment Programme

Report

June 14th, 2024

Youth Capital's resources

What effect does government spending on social programmes have on private sec- tor incomes and jobs? Policy-makers, es- pecially in developing countries with low average incomes and productivity, often perceive a trade-off between alleviating poverty and unemployment directly with social assistance and public employment programmes, versus other resource alloca- tion options intended to support economic growth and job creation with long-run ben- efits. These aims are somewhat reconciled if government social spending has broader benefits for incomes and jobs among non- beneficiaries. We study such initial stimu- lus effects from a large public employment programme in South Africa, by matching anonymized programme participants with high-frequency sales data from a major re- tailer, finding a sharp increase in spending which we show implies benefits to value added, job creation and wages.


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Learning brief

Closing the gender gap in Youth Employment

Learning brief

Unlocking youth employment opportunities in South Africa's priority growth sectors

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