Wage subsidies and COVID-19: The distribution and dynamics of South Africa's TERS policy

Timothy Köhler () and Robert Hill ()
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Robert Hill: Development Policy Research Unit, University of Cape Town

Working Papers from University of Cape Town, Development Policy Research Unit

Abstract: Wage subsidy-based job retention policy has served as a dominant tool used to mitigate job losses in the context of COVID-19. In South Africa, such a policy served as a core component of the government’s policy response: the Temporary Employer-Employee Relief Scheme (TERS). We make use of longitudinal survey data to analyse aggregate and between-group TERS receipt during the pandemic as well as the relationship between receipt and job retention. We find that although the policy reached millions of workers, coverage was highest during the beginning of the pandemic. Although several groups disproportionately benefited, many vulnerable groups became more likely to receive benefits over time. Benefits were higher in relative terms for lower-wage workers. We find evidence of a significant, positive relationship between TERS receipt and job retention, suggesting the policy may have succeeded in its aim of minimizing job losses, however only during the most stringent lockdown period.

Keywords: Wage subsidy; Job retention; South Africa; COVID-19; Temporary Employer-Employee Relief Scheme; Labour market (search for similar items in EconPapers)
JEL-codes: J08 J38 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2021-11
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Published in Working Paper Series by the Development Policy Research Unit, November 2021, pages 1-39

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Journal Article: Wage subsidies and COVID-19: The distribution and dynamics of South Africa’s TERS policy (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ctw:wpaper:202109

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