Understanding and explaining the relationship between social welfare policies and poverty
across the world remains a significant challenge that has raised intense scholarly debate. A
number of suggestions have been offered on how to measure poverty in its variety of guises,
ranging from absolute poverty to relative poverty to multidimensional models.
In line with Rawls’ theory of justice and the conceptual framework of a rights-based
approach, this research study seeks to analyse the extent to which social welfare policies, in
particular the Child Support Grant, has an impact on poverty and the inequalities of people
living in households with children in South Africa.
Quantitative methods of research have been applied throughout the study and measurement
of poverty has been made using an absolute poverty line of R450 per capita per month. The
South African microsimulation model (SAMOD) was used to analyse the various scenarios of
the social policies. In addition to the generally used social and demographic variables, the
SAMOD database contains detailed information on households related to five areas: income,
consumption, taxation, participation in various social transfers and job market position. It is
also based on the statistical data from the South African 2000 and 2005/6 SA Income and
Expenditure Surveys and the 2000 and 2006 Labour Force Surveys. The range of possible
social and economic changes that can be modelled is defined by the information available on
the microsimulation units in the database. In general, data entry and analysis has been done
using statistical software STATA version 10.1.
The study assessed the extent of child poverty in South Africa using five different policy
scenarios, and modelled the impact on poverty and inequalities of people living in households
with children using the Foster-Greer-Thorbecke (FGT) index of poverty measurement,
including poverty rate P0, (headcount index ratio), poverty gap index P1, (the depth of
poverty), and the severity of poverty P2 (squared poverty gap index). Societal welfare
inequalities have been measured using the Gini co-efficient. In general, the scenario analysis
was based on the 2007 population baseline and 2008 government policy rules.