Click here for search results
Economy-wide and distributional impacts of an oil price shock on the south African economy
Author:Essama-Nssah, B.; Go, Delfin S.; Kearney, Marna; Korman, Vijdan; Robinson, Sherman; Thierfelder, Karen; Collection Title:Policy Research working paper ; no. WPS 4354
Country:Southern Africa; Date Stored:2007/09/18
Document Date:2007/09/01Document Type:Policy Research Working Paper
SubTopics:Access to Finance; Economic Theory & Research; Markets and Market Access; ; Labor PoliciesLanguage:English
Major Sector:Public Administration, Law, and JusticeRel. Proj ID:3S-Za Econ Modeling On Wage Subsidy And External Shocks -- -- P104299;
Region:AfricaReport Number:WPS4354
Sub Sectors:General public administration sectorVolume No:1 of 1

Summary: As crude oil prices reach new highs, there is renewed concern about how external shocks will affect growth and poverty in developing countries. This paper describes a macro-micro framework for examining the structural and distributional consequences of a significant external shock-an increase in the world price of oil-on the South African economy. The authors merge results from a highly disaggregative computable general equilibrium model and a micro-simulation analysis of earnings and occupational choice based on socio-demographic characteristics of the household. The model provides changes in employment, wages, and prices that are used in the micro-simulation. The analysis finds that a 125 percent increase in the price of crude oil and refined petroleum reduces employment and GDP by approximately 2 percent, and reduces household consumption by approximately 7 percent. The oil price shock tends to increase the disparity between rich and poor. The adverse impact of the oil price shock is felt by the poorer segment of the formal labor market in the form of declining wages and increased unemployment. Unemployment hits mostly low and medium-skilled workers in the services sector. High-skilled households, on average, gain from the oil price shock. Their income rises and their spending basket is less skewed toward food and other goods that are most affected by changes in oil prices.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 57 pagesOfficial version*1.36
TextText version**
How To Order

See documents related to this project
* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.

Permanent URL for this page: