Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect

  • Nicholas M Odhiambo University of South Africa

Abstract

In this article we examine the dynamic causal relationship between economic growth, employment, and poverty reduction in South Africa -- using the Auto-Regressive Distributed Lag (ARDL) bounds testing procedure. The study attempts to answer one critical question: does economic growth in South Africa trickle down to the poor through job creation? The study uses two proxies to measure the incidence of poverty in South Africa, namely household consumption per capita and infant mortality. The empirical results of the study fail to support the trickle-down effect between economic growth and poverty reduction in South Africa. Moreover, the results show that there is no causal relationship between economic growth and poverty reduction in either direction. The results apply irrespective of whether the poverty level is measured by the real per-capita consumption or by the infant mortality rate.

Author Biography

Nicholas M Odhiambo, University of South Africa
Prof Nicholas M. Odhiambo Economics Department University of South Africa (UNISA) P.O Box 392, UNISA 0003, Pretoria South Africa Tel: 27-12-4294829 Email: nmbaya99@yahoo.com
Published
2011-04-19
Section
Articles