South Africa’s Unemployment Insurance Fund Benefit Function: A Mathematical Critique

Aidan J. Horn
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Aidan J. Horn: Southern Africa Labour and Development Research Unit, University of Cape Town

No 276, SALDRU Working Papers from Southern Africa Labour and Development Research Unit, University of Cape Town

Abstract: This paper highlights the unnecessary complexity of South Africa’s Unemployment Insurance Fund (UIF) benefit function, known as the Income Replacement Rate (IRR), and the disadvantageous manner in which the IRR is low for most earners. Possible alternative formulae are described, along with the implications for total expenditure on the UIF. The paper recommends simpler (and more optimal) formulae.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ldr:wpaper:276

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