This paper provides an analysis of the role of social policies in alleviating poverty in South Africa. In doing so, the paper assesses the contribution of education and social security in reducing poverty in the country. The paper suggests that although there is limited scope for further initiatives for poverty alleviation, there are three areas of policy that should receive increased emphasis - namely, improving the quality of education, expanding low-wage public works programmes, and government intervention in the capital market to ensure enhanced access for the poor.
The paper utilises a class of poverty measures to determine the potential cost to the fiscus, in 1995 Rands, of alleviating poverty in South Africa. The simulations are undertaken for both households and individuals in the society, by the different covariates of poverty. The study finds that the commitment required from the state to reduce poverty, is fairly modest, albeit within the realm of very strict assumptions. In addition, the paper illustrates that individual and household level data imparts differential poverty information, which is important for policy prescriptions. Finally, it is evident that for state targeting purposes, the nature of household poverty is fairly easily reduced to a small sub-group of labour market defined household types.