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Labor market discrimination and sorting: Evidence from South Africa
No full textUsing a unique data set of classified ads in South Africa, I explore whether employers discriminate against immigrants in the hiring process. I develop a quasi-experimental method to estimate discrimination exploiting variation in the applicant pool composition due to the timing of postings. Consistent with a tournament models in which immigrants are penalized, I find that both foreigners and natives benefit from being pooled with foreign job seekers. Next, I test whether discrimination affects search behavior. Controlling for location fixed effects, I find suggestive evidence for sorting: immigrants search further away and higher discrimination in the residential area is positively correlated with the decision to search in different suburbs.This paper greatly benefited from discussions with and comments from Willa Brown, Rulof Burger, Adi Eyal, Rema Hanna, Lawrence Katz, Asim Khwaja, Sendhil Mullainathan, Devah Pager, Dorit Posel, Vimal Ranchod, Roland Rathelot, Jann Spiess and seminar participants Harvard University, University of Cape Town, Stellenbosch University and the New England Development Conference. Simeon Abel provided excellent research assistance. All errors and omissions remain fully my responsibility. I gratefully acknowledge funding from the World Bank’s Gender Innovation Lab
Social stratification, life chances and vulnerability to poverty in South Africa
No full textThe wave of upbeat stories on the developing world's emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and empirically measured. The contribution this paper makes to this literature is both conceptual and empirical. The conceptual contribution consists in proposing a schema of social stratification with particular relevance for the emerging and developing country context marked by high economic insecurity. Building on a recently developed framework that defines the middle class in relation to their (in)vulnerability to poverty, in this paper, we propose a multi-layered class model that differentiates five social classes: (i) the chronic poor, characterised by high poverty persistence, (ii) the transient poor, who have above average chances of escaping poverty, (iii) the non-poor but vulnerable, whose basic needs are currently being met but who face above average risks of slipping into poverty, (iv) the middle class, who are in a better position to maintain a non-poor standard of living even in the event of negative shocks, and (v) the elite, whose living standards situate them far above the average. The empirical contribution consists in the application of this conceptual innovation to the South African case using a model of poverty transitions that is fitted to four waves of panel data from the National Income Dynamics Study (NIDS) covering 2008 through to 2014/15. Given the classification derived in this paper, we find that only about 20 per cent of the South African population can be considered as stably middle class. Africans remain underrepresented in the middle class, and race is still one of the strongest predictors of poverty in South Africa. Members of larger, female headed, or rural households face a higher risk of poverty, and are less likely to enter the ranks of the middle class. Having access to stable labour market income, by contrast, is a key determinant for households to achieve economic stability in South Africa.This publication has been produced with the financial assistance of the Programme to Support Pro-Poor
Policy Development (PSPPD), located in the Department of Planning, Monitoring and Evaluation (DPME),
and of the World Bank Group, Poverty Global Practice Unit, Africa Region. Simone Schotte acknowledges
support from the German Institute of Global and Area Studies and the Evangelisches Studienwerk
Villigst. Murray Leibbrandt acknowledges the Research Chairs Initiative of the Department of Science and
Technology and National Research Foundation for funding his work as the Chair in Poverty and Inequality
Research.
The authors are grateful to Francois Bourguignon, Denis Cogneau, Arden Finn, Lena Giesbert, Kanishka
Kacker, Stephan Klasen, Jann Lay, Nga Thi Viet Nguyen, Victor Sulla, Martin Wittenberg, Ingrid Woolard,
and Precious Zikhali for helpful suggestions. Responsibility for the content of the paper remains with the
authors
Understanding the National Student Financial Aid Scheme
No full textThis factsheet was developed as a compendium to the F(r)ee Higher Education sheet. Recognizing that NSFAS loans are currently the government’s key strategy to facilitate higher education access among low-income students, this sheet details the scope, functioning, and plans for the scheme with the aim to provide clear and accessible information
Aiming for a Moving Target: The Dynamics of Household Electricity Connections in a Developing Context
No full textWe investigate household electricity access in a poor rural setting in South Africa, showing that the acquisition of connections is not the simple monotonic process often assumed in the literature. We argue that changes in household electricity access are a complex and changing outcome of two key time-varying processes: (1) net connections (new connections less disconnections) and (2) household formation and dissolution dynamics. In particular, we show that migration can occur in ways which either improves or worsens access. Even for households that stay in place we observe many disconnections. Therefore, in their efforts to improve access to electricity, governments in developing countries may in fact be aiming for a moving target—if the infrastructure is provided in places from which people are migrating, if many new households are being formed in un-serviced areas, or if existing connections are being lost
The extent of churn in the South African youth labour market: Evidence from NIDS 2008-2015
No full textThe transition from schooling to work for many South African youth (aged 15-34 years) is neither a smooth nor immediately successful one. This is apparent in the persistently high youth unemployment rate that has been an enduring feature of the labour market. However, what the unemployment rate does not reveal is the degree to which it is the same youth who remain persistently unemployed, rather than moving between labour market states. In other words the unemployment statistic does not give any indication of the degree of churn in the South African youth labour market. This paper explores the nature and extent of this churn by investigating patterns of persistence of employment, persistence of unemployment, and movement between these states.
To investigate these labour mobility issues, the first four waves of the National Income Dynamics Study (NIDS) are analysed. The data for the first wave of NIDS was collected in 2008, the second in 2010-2011, the third in 2012, and the fourth in 2014-2015. A balanced panel of Wave 1 youth is used to look at transitions in labour market states from Wave 1 to Wave 4
Accuracy and determinants of perceived HIV risk among young women in South Africa
No full textBackground
HIV risk perceptions are a key determinant of HIV testing. The success of efforts to achieve an AIDS-free generation – including reaching the UNAIDS 90–90-90 target – thus depends critically on the content of these perceptions. We examined the accuracy of HIV-risk perceptions and their correlates among young black women in South Africa, a group with one of the highest HIV incidence rates worldwide.
Methods
We used individual-level longitudinal data from the Cape Area Panel Study (CAPS) from 2005 to 2009 on black African women (20–30 years old in 2009) to assess the association between perceived HIV-risk in 2005 and the probability of testing HIV-positive four years later. We then estimated multivariable logistic regressions using cross-sectional data from the 2009 CAPS wave to assess the relationship between risk perceptions and a wide range of demographic, sexual behaviour and psychosocial covariates of perceived HIV-risk.
Results
We found that the proportion testing HIV-positive in 2009 was almost identical across perceived risk categories in 2005 (no, small, moderate, great) (χ2 = 1.43, p = 0.85). Consistent with epidemiologic risk factors, the likelihood of reporting moderate or great HIV-risk perceptions was associated with condom-use (aOR: 0.57; 95% CI: 0.36, 0.89; p < 0.01); having ≥3 lifetime partners (aOR: 2.38, 95% CI: 1.53, 3.73; p < 0.01); knowledge of one’s partner’s HIV status (aOR: 0.67; 95% CI: 0.43, 1.07; p = 0.09); and being in an age-disparate partnerships (aOR: 1.73; 95% CI: 1.09, 2.76; p = 0.02). However, the likelihood of reporting moderate or great self-perceived risk did not vary with sexually transmitted disease history and respondent age, both strong predictors of HIV risk in the study setting. Risk perceptions were associated with stigmatising attitudes (aOR: 0.53; 95% CI: 0.26, 1.09; p = 0.09); prior HIV testing (aOR: 0.21; 95% CI: 0.13, 0.35; p < 0.01); and having heard that male circumcision is protective (aOR: 0.38; 95% CI: 0.22, 0.64; p < 0.01).
Conclusions
Results indicate that HIV-risk perceptions are inaccurate. Our findings suggest that this inaccuracy stems from HIV-risk perceptions being driven by an incomplete understanding of epidemiological risk and being influenced by a range of psycho-social factors not directly related to sexual behaviour. Consequently, new interventions are needed to align perceived and actual HIV risk
Readiness for Antiretroviral Therapy: Implications for Linking HIV-Infected Individuals to Care and Treatment
No full textUsing survey data collected immediately after referral for ART (N = 87), this study examined ART-readiness among individuals (18 years and older) attending a mobile health clinic in South Africa. Most participants reported being very ready (84%) and motivated (85%) to start ART, but only 72% were assessed as ready for ART on all measures. Treatment readiness was lower among individuals who did not think they would test HIV-positive (aOR 0.26, p < 0.05) and among individuals who reported being in good health (aOR 0.44, p < 0.1). In contrast, higher readiness was associated with better ART knowledge (aOR 4.31, p < 0.05) and knowing someone who had experienced positive health effects from ART (aOR 2.65, p < 0.05). Results indicate that post-test counselling will need to be designed to deal with surprise at HIV diagnosis, and that health messaging needs to be carefully crafted to support uptake of ART among HIV-positive but healthy individuals. Further research is needed on effective post-test counselling approaches and effective framing of health messaging to increase awareness of the multiple positive benefits of early ART initiation and corresponding readiness to engage in treatment
Wages and Wage Inequality in South Africa 1994–2011: Part 1 – Wage Measurement and Trends
No full textWe analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid
Tax(i)ing the Poor? Commuting Costs in South African Cities
No full textIn this paper, I describe the monetary and time costs of commuting to work in South African cities, and how these have changed in the post‐Apartheid era. I interpret these results in light of a paper by Brueckner, who used a simple urban model to suggest that location and commuting patterns by race could change as a result of the repeal of Apartheid era legislation such as the Group Areas Act that made it impossible for black South Africans to live near the centre of cities. A key finding is that monetary and time costs of commuting in South African cities are high and have increased in the post‐Apartheid period. Journey times are much higher than the OECD country average and a sample of developing country cities. Part of the explanation for increasing average commute times is population growth in South African cities, which has been substantial. Both the population and number of commuters doubled between 1993 and 2013 in the six metropolitan municipalities (metros) analysed in this paper. Since commuting costs a substantial amount and generates negative externalities through congestion I also explore the financing of public transport.The paper has benefited from the comments of participants at SALDRU and CSSR (University of Cape Town) and RESEP (Stellenbosch University) seminars, Jan Brueckner and the anonymous reviewer. The financial assistance of the Research Project on Employment, Income Distribution and Inclusive Growth is acknowledged. Findings, opinions and conclusions are those of the author and are not to be attributed to said Research Project, its affiliated institutions or its sponsors'
Exploring a negative income tax for South Africa: impacts on income inequality and poverty
No full textThis paper explores the potential of a negative income tax to tackle South Africa’s dual challenges of
poverty and income inequality. Using a static, arithmetic microsimulation model with NIDS Wave 4 as
the base dataset, we simulate a negative income tax in which recipients receive an income subsidy
proportional to their income if it is below a set amount and a guaranteed subsidy if they have zero
income. Two different sizes for the guaranteed subsidy are simulated, both pegged to recent poverty
lines. The simulations show that the negative income tax significantly reduces both inequality and
poverty levels, but that this necessarily comes at a high cost.Emma Helen Rasmussen is a PhD student at the University of Cape Town and research assistant at SALDRU.
This paper is based on a chapter from my Master’s thesis on the progressivity of the personal income
tax system in South Africa. I acknowledge comments and contributions from Ingrid Woolard and Murray
Leibbrandt