Expanding a wage subsidy during lockdown

Job retention schemes have been one of the many policy tools used to curb the effects of a lockdown and the COVID-19 crisis. The system works by reducing labour costs which could prevent or reduce the increase in unemployment. South Africa swiftly adapted their wage subsidy scheme, meant to create jobs, into a job retention scheme by expanding the coverage and increasing the value of the subsidy. This note outlines how the South African government has adapted their flagship policy for youth job creation to address the surge in unemployment rates during the COVID-19 pandemic.