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

The IRR ranges between 38% and 60% with a maximum salary threshold of R17 712 per month.5 Benefits range from a minimum of approximately the monthly equivalent of the national minimum wage of R3 500 per month (regardless of if the calculated benefit falls below this amount) to a maximum of R6 730 per month (regardless of if the calculated benefit exceeds this amount, given the salary upper- bound. [...] The decline in the proportion of 18- to 34-year-old recipients over time, although insignificant, is potentially of concern, and indicate that the youth – a vulnerable group in and of themselves – were less than proportionally supported by the TERS programme relative to the group’s share of employment.21 Unsurprisingly, given the nature of the TERS programme, those employees who had a written cont. [...] As a result, the expansion of this policy and increase in the monthly claim amount is likely to have spillover effects in supporting some of the youth who have not been supported by the TERS programme. [...] Simply put, the estimates in panel (a) consider, for each wave, the concentration of TERS receipt across the wage distribution, and those in panel (b) consider, for each wave, but conditional on receipt, the distribution of TERS benefits across the wage distribution.23 The figure suggests that TERS receipt over the period has been relatively distribution-neutral (that is, neither pro-poor nor pro-. [...] 24 Wage subsidies and COVID-19: The distribution and dynamics of South Africa's TERS policy These results speak to the role of the TERS in providing assistance to firms that may have been limited in their operational scope through the ‘hard lockdown’.