Sectoral growth and poverty alleviation: A multiplier decomposition technique applied to South Africa

How does an increase in a sector's output affect poverty alleviation? In th is paper a multiplier decomposition for a socioeconomic system represented by a Social Accounting Matrix (SAM) is used to study this linkage. The deco mposition applied to South Africa reveals that growth in agriculture, servi ces and some manufacturing sectors can alleviate poverty for the black Afri can population. For sectoral growth to be effective, however, the need for appropriate skill acquisition for the poor must be addressed directly. Only long-term policies geared towards improving both economic growth and the h uman capital stock of the poor can lead to significant poverty alleviation. (C) 1999 Elsevier Science Ltd. All rights reserved.