Google Scholar profile


Labour Market Effects of the Great Lockdown in South Africa: Employment, Earnings and the Temporary Employer/Employee Relief Scheme

by Mr Aidan Horn and Prof Andrew Donaldson. Please read the papers in the following order:

  1. Donaldson, A.R. & Horn, A.J. 2021. Employment and earnings by industry before Covid-19. (SA-TIED Working Paper). (Forthcoming).

Employment levels and the distribution of earnings by industry are estimated in this paper for 2019/20, before the impact of Covid-19 and the accompanying economic downturn. Drawing on both the Quarterly Labour Force Survey (QLFS) and the Quarterly Employment Statistics (QES) aggregates, our aim is to derive estimates of the distribution of earnings consistent with the System of National Accounts (SNA) production accounts and suitable for use in a social accounting framework and in monitoring aggregate labour market trends.We draw attention to similarities and differences between the QLFS, QES and SNA data sources, and note differences in the implicit trends over the 2010-2020 decade. We derive distributions of gross earnings by industry, consistent with the national accounts compensation of employees’ aggregates adjusted to include earned income attributable to employers and the self-employed in unincorporated enterprises.Both employment and earnings were severely disrupted by the 2020 Covid-19 economic shock, and at the time of writing (early 2021) the economic recovery path is far from clear. This paper provides sectoral benchmark data against which the recovery might be assessed.
  1. Horn, A.J. & Donaldson, A.R. 2021. Earnings and employment forecasting. (SALDRU Working Paper). (Forthcoming).

This paper quantifies the impact of the covid-19 lockdown on aggregate earnings and employment in South Africa. We find counterfactual autoregressive forecasts based on time series data before the lockdown started, then compare those forecasts with actual outcomes for the last three quarters of 2020. In the second quarter, we estimate that total earnings dropped 9% and total employment dropped 14%, against the counterfactual. Based on the national accounts and the Quarterly Labour Force Survey, aggregate earnings recovered twice as quickly as employment between the second and fourth quarters of 2020.
  1. Horn, A.J. & Donaldson, A.R. 2021. Temporary Employee/Employer Relief Scheme Outcomes. (SALDRU Working Paper). (Forthcoming).

The Temporary Employee/Employer Relief Scheme (TERS) distributed payments to furloughed workers in South Africa, during the covid-19 lockdown. This paper investigates, across industries, what proportion of Unemployment Insurance Fund (UIF) contributors were covered by the scheme, and how TERS payments were distributed across the earnings distribution. We find that, because the UIF is a contributory social insurance scheme, mainly middle- and upper-income earners benefited from TERS.
  1. TERS policy brief? (Donaldson)
    Maybe second half of the Part 3 paper above.

This section will still be edited with links to (social) media announcements and OpenSALDRU working paper links. The papers will be published in June 2021. Our project has created knowledge on how to <a href="social-insurance website">simulate the cost of social insurance schemes</a>.

Working papers

  • Horn, A.J. 2021. South Africa's Unemployment Insurance Fund Benefit Function: A Mathematical Critique. (SALDRU Working Paper Number 276). Cape Town: SALDRU, School of Economics, University of Cape Town. Available:

This paper highlights the unnecessary complexity of South Africa's Unemployment Insurance Fund (UIF) benefit function, known as the Income Replacement Rate (IRR), and the disadvantageous manner in which the IRR is low for most earners. Possible alternative formulae are described, along with the implications for total expenditure on the UIF. The paper recommends simpler (and more optimal) formulae.
    • Policy Brief (forthcoming)

Dissertations and essays


Horn, AJ. 2020. Teacher Remuneration in South Africa: Incentivizing Performance. (Approved).

Despite high government expenditure, education in South Africa is poor quality. We focus on how teacher quality can be improved by improving the structure of their remuneration. Performance-related pay, which can be based either on measuring learner test scores, or by measuring teacher content knowledge or pedagogical skills, has sometimes been successful in countries with low levels of teacher effort, and may be applicable in South Africa. However, measures to enhance accountability or reward performance need to take into account resistance by teacher unions. We situate the discussion in the context of South Africa’s existing framework for teacher remuneration under the Occupation Specific Dispensation. From this, we criticize the relatively flat progression of salaries as teachers’ experience increases, which discourages skilled teachers from remaining in the profession. We propose that performance-based pay be integrated into the existing salary structure through bonus salary notch progressions, thereby also increasing the slope of salary progression.


Horn, AJ. 2018. Wage Subsidies in South Africa: Context and Future Directions. DOI: 10.13140/RG.2.2.14064.89608

This paper explores the feasibility for utilizing a wage subsidy in South Africa. Whilst a wage subsidy is already in place in South Africa, it is fairly unsubstantial, and this paper investigates the prospect of expanding it. Design characteristics of wage subsidies are discussed, in the context of South Africa. The paper shows how a wage subsidy is currently being used in South Africa (the Employment Tax Incentive) and ventures to show how a wage subsidy can be constructed in future. The finding is that wage subsidies currently do little to reduce unemployment, especially with the low levels of subsidization such as what currently occurs in South Africa, but that subsidies would need to be considerably extended in order for there to be a determinable impact on unemployment. Some suggestions are made about targeting subsidies towards employment-intensive industries, and towards small firms.

Undergraduate essays

ResearchGate and

Current research interests


...To do: bulk out this section, with more of a proposal summary for my PhD?

Starting 2021. Occupations in South Africa. Chapters:

  1. Occupation data in PALMS, and other labour market datasets.
    Occupational trends over time, and future trends. SAMs?
    Spin-off: SALDRU Occupational Earnings Comparison Tool web applet

  2. Task-based occupational analysis (including an international literature review).

  3. Inequality of skills and productivity


Inflation; informal sector.