South African Journal of Economic and Management Sciences
On-line version ISSN 2222-3436
Print version ISSN 1015-8812
VAN HEERDEN, Jan H. Who would eat more with a food voucher programme in South Africa?. S. Afr. j. econ. manag. sci. [online]. 2009, vol.12, n.3, pp.297-306. ISSN 2222-3436.
A Computable General Equilibrium model is used to find the effects of a food voucher scheme on the economy in South Africa. If firms consider the issuing of vouchers as increased remuneration, they will hire fewer labourers. The higher labour cost increases the total cost of production and lowers supply. Real Gross Domestic Product decreases and the economy becomes worse off. However, depending on the size of the government's involvement in such a scheme as well as the tax policies that are used to fund it, a food voucher scheme could benefit the poor, and improve the distribution of wealth in the country.