Evaluating the impact of social grants and the Expanded Public Works Programme (EPWP) on poverty reduction in South Africa

Abstract

Given that poverty has remained one of the biggest challenges facing South Africa, an in-depth understanding of the poverty reduction measures implemented by government is necessary. It is important to understand the efficacy of these social protection programmes as huge amounts of government spending is allocated towards it. This paper analyses the impact of the Expanded Public Works Programme (EPWP) and social grants as some of the social protection measures implemented by the South African government. Literature reviewed in this paper reveals that these anti-poverty measures have contributed significantly towards the reduction of poverty levels in South Africa. The study analyses each social protection measure and uses the Income and Expenditure Survey data (2010/11) and EPWP phase 1 national data to analyse social grants and EPWP respectively. The income decomposition technique is used to analyse household income and the results of the impact of social grants on poverty are presented using the Foster-Greer-Thorbecke indices. However, only the results of the prevalence of poverty (headcount) are explained in this study. The results show that social grants have significantly reduced poverty levels in areas with high poverty rates such as the Eastern Cape and Limpopo provinces, amongst the African population, in female-headed households, and in rural areas. For EPWP, an estimate of the impact on poverty is done by assessing the number of poor participants who were involved in the programme. Also, the duration of the project is determined and the results indicate that most projects were short lived and did not ensure a consistent provision of income for the participants. Furthermore, the Ordinary Least Squares regression model is used to analyse how expenditure allocation for the programme affects work opportunities produced. Such an investigation is done based on the different sectors in which projects are implemented as well as provincial distributions.