COVID-19 Grant Policy and Unemployment in South Africa

The COVID-19 pandemic prompted the introduction of South Africa’s Social Relief of Distress (SRD) grant to mitigate income shocks among individuals excluded from existing social programs. This study utilizes a three-year national representative dataset from the General Household Survey and applies a fixed effects regression framework to estimate the association between COVID-19 SRD grants and unemployment. The findings indicate a positive and statistically significant association between grant receipt and unemployment. Specifically, the results suggest that grant recipients are approximately 27–32% more likely to be unemployed than non-recipients. The findings suggest that while the grant provided necessary initial financial relief, in the absence of complementary labour market interventions, income support alone may be insufficient to address unemployment. The study concludes by recommending the coordination of temporary income relief integrated with active labour market policies to promote sustainable employment outcomes.