From immigrant workers to Free Basic Electricity: what the evidence tells us.

This edition of Econ3x3 features two new articles by young economists, both PHD candidates. They are part of the group of 11 early-career economists, who have turned their research into accessible, policy-relevant articles, with which we have re-launched our website with the support of SA-TIED (Towards Inclusive Economic Development).

Valentine Madzudzo writes on how the various amnesties extended to Zimbabwean workers from 2014 to 2022 have affected local and immigrant employment in two urban areas – eThekweni and Cape Town. The Zimbabwean Exemption Permit of 2017 effectively regularised the status of some 178 000 Zimbabweans working and studying in South Africa.

He finds that, apart from one year (2018) in Cape Town, there was no significant loss in local jobs.  The 2018 loss was concentrated mainly in the CBD, probably in the restaurant industry. But generally, the program formalised previously informal workers and created complementarities between local and immigrant workers.

The second article, by Julia Tatham, examines the effects of the Free Basic Electricity Grant on household welfare. Theoretically, the  grant is available to indigent households, defined as those with a total income below twice the level of the old-age pension grant (an astonishing 60% of households in South Africa fall into this category).  

The grant has measurable beneficial effects on household welfare, including even small but significant improvements in literacy and numeracy because the availability of light enables children and young people to study at night.

However only a small proportion of those who are eligible receive it. Moreover, the parlous state of finances in some municipalities means they cannot effectively administer the grant.

We hope both articles contribute to the evidence necessary for policymakers to find effective ways to tackle our developmental challenges.

Pippa Green