Devising social security interventions for maximum poverty impact
South Africa's social insurance system presently reaches the top half of the income distribution, i.e. most formally employed, but the magnitude of the benefits still leaves much of the labour force inadequately protected. Some of the poor are reached by social assistance measures, but such spending is already high for a developing country and fiscal constraints place limits on its expansion. Schemes for expanding social security thus need to be realistic and incremental. Using poverty dominance analysis and cumulative density curves, poverty was found to be much worse for young children (0-6), older children (7-14), discouraged work seekers and members of female-headed households than for the population as a whole. Three areas were identified that would seem to hold some promise for incrementally expanding social security: expanding coverage of social insurance, expanding social assistance (particularly child support grants) and low-wage public employment schemes. Whilst unemployment is rampant, it will remain difficult to plug all holes in the social safety net. Sustained economic growth remains the necessary, albeit insufficient, condition for substantial poverty reduction.