Wage subsidies and COVID-19: The distribution and dynamics of South Africa’s TERS policy

The effect of wage subsidies on job retention: Evidence from South Africa during the COVID-19 pandemic

“…Although minimal, existing research on the policy has highlighted its progressive coverage. Köhler and Hill (2022) show that benefits were higher in relative terms for lower-wage workers and that, over time, receipt increased among several groups of vulnerable workers. The authors also show that TERS receipt is strongly and positively correlated with job retention during the beginning of the pandemic (Köhler and Hill 2022).…”

“…Köhler and Hill (2022) show that benefits were higher in relative terms for lower-wage workers and that, over time, receipt increased among several groups of vulnerable workers. The authors also show that TERS receipt is strongly and positively correlated with job retention during the beginning of the pandemic (Köhler and Hill 2022). Van der Berg et al (2022) find a negative relationship between TERS receipt and household food insecurity during the pandemic.…”

Lockdown stringency and employment formality: evidence from the COVID-19 pandemic in South Africa

“…Formally referred to as the COVID-19 Temporary Employer-Employee Relief Scheme (TERS), the policy provided relief to workers who suffered income loss because of a full or partial closure of their employer’s operations, and had the primary aim of mitigating job loss. Considering South Africa’s extreme levels of unemployment, Köhler and Hill ( 2022 ) argue that such a job retention policy has served as the country’s most important labour market intervention in response to the pandemic. Benefits ranged from 38 to 60% of a worker’s wage subject to lower and upper limits, or between ZAR3 500 (US$ 502 PPP, the equivalent of the national minimum wage) and ZAR6 730 (US$966 PPP) per month.…”

“…The TERS also experienced various extensions and revisions as the pandemic progressed, and by 2 years after its inception, over 5.7 million workers had benefitted (Nxesi 2022 ). Existing studies have provided favourable evidence of the positive effects of the policy on job retention during the beginning of the pandemic, both descriptively (Köhler and Hill 2022 ) and causally for formal, private sector workers (Köhler et al 2022 ). At the time of writing, the policy was drawing to a close.…”

The labour market and poverty impacts of COVID‐19 in South Africa

“…In this paper, we also consider receipt of 'the UIF's Temporary Employer/Employee Relief Scheme (TERS)', which is asked about directly in the labour market module (in those words), for both employers and employees. Various measures were put in place which would have made TERS receipt by employees more transparent, such as that the UIF made public the updated list of employers receiving TERS and (by August) that the UIF paid the TERS amount into employees' bank accounts directly (Köhler & Hill, 2022). However, insofar as employee-respondents were not aware of receiving the grant, we will underestimate TERS receipt.…”