Estimating employment gains of the proposed infrastructure stimulus plan in post-Covid-19 South Africa
OUTPUT TYPE: Journal Article
PUBLICATION YEAR: 2021
TITLE AUTHOR(S): A.Habiyaremye, O.Molewa, P.Lekomanyane
KEYWORDS: COVID-19, ECONOMY, INFRASTRUCTURE DEVELOPMENT
DEPARTMENT: Equitable Education and Economies (IED)
Print: HSRC Library: shelf number 12006
HANDLE: 20.500.11910/16046
URI: http://hdl.handle.net/20.500.11910/16046
If you would like to obtain a copy of this Research Output, please contact Hanlie Baudin at researchoutputs@hsrc.ac.za.
Abstract
For the economic recovery in the wake of Covid-19 pandemic, South Africa announced the launch of an ambitious ZAR 2.3 trillion infrastructure investment plan. This paper uses a simplified yet reliable method to analyse the potential growth and employment effects of this stimulus plan. Based on lower and upper bound values of the country's estimated fiscal multipliers, we built a scenario prediction template with which output and employment expansion can be analysed within specified constraints on the fiscal space and the country's economic dynamics. Our estimation model suggests that with a 50% state participation in the recovery investment, the best case scenario of fiscal stimulation would enable the economy to create 2.23 million jobs over the first 5 years of the stimulus investments (of which 1.74 million would be attributed to the stimulus effect), while the more realistic scenario based of the lower bound value of the fiscal multiplier with only 30% state participation predicts the creation of 1.67 million additional jobs, of which 1.18 million would be attributable to the stimulus. Our analysis also suggests that investing in the types of infrastructure that shift the production technology could change the long-term growth trajectory, while focusing on employment-intensive investment may only generate temporary effects.-
Related Research Outputs:
- 'Dark cloud with a silver lining'?: the prospect of a rise in material values or a post-material turn in post-pandemic South Africa
- Pandemic hits South Africa hard, requiring clear safety messaging
- Youth education and employment in the digital economy
- Recovery from Covid-19 in South Africa
- Understanding the differential impacts of COVID-19 among hospitalised patients in South Africa for equitable response
- Public appraisal of social and economic infrastructure delivery
- South Africa and globalisation
- Cross-border movement between Lesotho and South Africa: some perspectives
- The airport, the road and the school: infrastructure delivery in KwaZulu-Natal
- Development funding in South Africa 1998-1999
- Small market areas (SMAs) for South Africa
- Making this our last passive moment: the way forward
- Infrastructure mandates for change 1994-1999
- Re-thinking infrastructure policies in the 21st century
- Infrastructure mandates for reconstruction
- Human resources development review 2003: education, employment and skills in South Africa
- Food security in South Africa: key policy issues for the medium term
- Rural development: the provision of basic infrastructure services
- Research project to support the five-year plan for the provision of school infrastructure: Mpumalanga Province
- Trends and policy challenges in the rural economy: four provincial case studies