Absent vaccines and pharmaceutical interventions, the only tool available to mitigate its demographic effects is some measure of physical distancing, to reduce contagion by breaking social and economic contacts. Policy makers must balance the positive health effects of strong distancing measures, such as lockdowns, against their economic costs, especially the burdens imposed on low income and food insecure households. The distancing measures deployed by South Africa impose large economic costs and have negative implications for the factor distribution of income. Labor with low education levels are much more strongly affected than labor with secondary or tertiary education. As a result, households with low levels of educational attainment and high dependence on labor income would experience an enormous real income shock that would clearly jeopardize the food security of these households. However, in South Africa, total incomes for low income households are significantly insulated by government transfer payments. From public health, income distribution and food security perspectives, the remarkably rapid and severe shocks imposed because of Covid-19 illustrate the value of having in place transfer policies that support vulnerable households in the event of ‘black swan’ type shocks.

Typescript prepared by Lisa Winkler at UNU-WIDER. UNU-WIDER acknowledges specific programme contribution from the National Treasury of South Africa to its project 'Regional Growth and Development in Southern Africa' and core financial support to its work programme from the governments of Denmark, Finland, Sweden, and the United Kingdom. The World Institute for Development Economics Research (WIDER) was established by the United Nations University (UNU) as its first research and training centre and started work in Helsinki, Finland in 1985. The Institute undertakes applied research and policy analysis on structural changes affecting the developing and transitional economies, provides a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and promotes capacity strengthening and training in the field of economic and social policy-making. Work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world.

Journal articleIFPRI3; CRP2DSGD; PIMPRCGIAR Research Program on Policies, Institutions, and Markets (PIM

Southern Africa -Towards Inclusive Economic Development (SA-TIED) SA-TIED is a unique collaboration between local and international research institutes and the government of South Africa. Its primary goal is to improve the interface between research and policy by producing cutting-edge research for inclusive growth and economic transformation in the southern African region. It is hoped that the SA-TIED programme will lead to greater institutional and individual capacities, improve database management and data analysis, and provide research outputs that assist in the formulation of evidence-based economic policy.

This study has been prepared within the UNU-WIDER project 'Regional Growth and Development in Southern Africa'.