‘Jobs versus Grants’: Are employment and basic income a policy trade-off?

The document challenges the belief that social grants create a 'culture of dependency' or discourage labour market participation in South Africa. By reviewing international and local evidence, it argues that cash transfers often facilitate job searches, stimulate local economies, and empower women. The authors advocate for a UBIG indexed to the upper-bound poverty line, funded through progressive taxation, as a means to eliminate poverty while supporting inclusive economic growth.

• International evidence from low- and middle-income countries indicates that unconditional cash transfers do not reduce labour supply and can instead increase rates of self-employment and migration to participate in the labour market.
• In South Africa, social grants like the Social Relief of Distress (SRD) grant actively facilitate job seeking by helping recipients cover essential costs such as transport, data, and printing.
• The cost of searching for a job in South Africa is significantly higher than the value of current basic grants; a 2019 study estimated the average monthly cost of job hunting at R938, while the SRD grant provided R350.
• Evidence refutes the myth that grant recipients spend funds on 'temptation goods' like alcohol and tobacco; in South Africa, 93.3% of SRD grant recipients spent their money on food.
• A universal basic income grant can improve gender equity by compensating unpaid domestic and care labour, thereby reducing women's financial dependence and vulnerability to abuse.
• Research on work motivation suggests that people are driven by intrinsic factors such as personal satisfaction and social integration, meaning that basic income security does not inherently lead to laziness.
• A UBIG may improve labour standards by providing workers with an 'exit option,' increasing their bargaining power to refuse exploitative work or seek better quality employment.
• Unemployment in South Africa is described as a structural phenomenon driven by legacies of Apartheid, deindustrialisation, and budget austerity, rather than individual behavioural failings.

APA

Institute for Economic Justice (2022). ‘Jobs versus Grants’: Are employment and basic income a policy trade-off? https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-jobs-vs-grants.pdf

Chicago

Institute for Economic Justice. ‘Jobs versus Grants’: Are employment and basic income a policy trade-off? 2022. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-jobs-vs-grants.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=‘Jobs versus Grants’: Are employment and basic income a policy trade-off? |date=September 2022 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-jobs-vs-grants.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2022jobs, author = {{Institute for Economic Justice}}, title = {{‘Jobs versus Grants’: Are employment and basic income a policy trade-off?}}, institution = {Institute for Economic Justice}, year = {2022}, month = sep, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-jobs-vs-grants.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }