921 research outputs found
Sort by
Problems with SWIID: the case of South Africa
No full textThe information contained in databases of summary statistics should look plausible when viewed in context. Judged by that criterion the Standardized World Income Inequality Database (SWIID) comes up short with its South African data. Figure 1 contains the series as extracted from the SWIID web site (Solt 2014b). The 95% confidence bands suggest that inequality in 1965, at the height of apartheid, was significantly lower than in the 2000s. This, however, flies in the face of much other evidence. For instance it is well-known that Black mine workers’ wages were static in real terms from the early twentieth century right up to the 1970s (e.g. van der Berg 1989). The wages of white miners, by contrast, increased, so that the ratio of White to Black mine wages reached its maximum of twenty to one in 1969 (Devereux 1983, p.18). Simkins (1979) estimated the Gini coefficient in 1970 at 0.71, which seems more in line with the political and social realities. Trying to understand how the SWIID may have arrived at such a misleading estimate is instructive about the types of problems that may be lurking elsewhere in the database.There are four potential sources of error in SWIID: measurement error, model error, imputation error and sampling error .Martin Wittenberg - Director, DataFirst and Professor, School of Economics, University of Cape Tow
A National Minimum Wage in the Context of the South African Labour Market
No full textUnderstanding the composition and wage structure of the South African labour market is crucial in the progressing national minimum wage debate in the country. This study highlights the centrality of wages in household income, and in determining inequality and poverty levels in the county. It then charts key trends in the labour market, before presenting a snapshot of the composition and earnings of the workforce in the current environment. A definition for a “working-poor” threshold is developed in the paper by linking individual earnings to household poverty. Finally, we consider the differential coverage that a national minimum wage would have on different sectors and demographic groups in the economy.This paper forms part of the National Minimum Wage Research Initiative (NMW-RI) undertaken by CSID in the School of Economics and Business Science at the University of the Witwatersrand. The NMW-RI presents theoretical and case-study evidence, statistical modeling and policy analysis relevant to the potential implementation of a national minimum wage in South Africa. For more information contact Gilad Isaacs, the project coordinator, at [email protected] or visit www.nationalminimumwage.co.za. SALDRU is grateful to the NMW-RI for making this paper available as a SALDRU Working Paper
Different dimensions of HIV-related stigma may have opposite effects on HIV testing: Evidence among young men and women in South Africa
No full textAlthough HIV-related stigma in general is known to deter HIV-testing, the extent to which different dimensions of stigma independently influence testing behaviour is poorly understood. We used data on young black men (n = 553) and women (n = 674) from the 2009 Cape Area Panel Study to examine the independent effects of stigmatising attitudes, perceived stigma and observed enacted stigma on HIV-testing. Multivariate logistic regression models showed that stigma had a strong relationship with HIV-testing among women, but not men. Women who held stigmatising attitudes were more likely to have been tested (OR 3, p < 0.01), while perceived stigma (OR 0.61, p < 0.1) and observed enacted stigma (OR 0.42, p < 0.01) reduced the odds significantly of women having had an HIV test. Our findings highlight that different dimensions of stigma may have opposite effects on HIV testing, and point towards the need for interventions that limit the impact of enacted and perceived stigma on HIV-testing among women
The margins of export competition: A new approach to evaluating the impact of China on South African exports to Sub-Saharan Africa
No full textChinese manufacturing exports to Sub-Saharan Africa challenge South Africa's economic influence in the region. To evaluate this, the paper develops and applies a conceptual framework that distinguishes between the intensive and extensive margins of Chinese export competition. South African exports of new and existing manufactured products to Sub-Saharan Africa are found to have been negatively affected by Chinese competition relative to exports from other countries. Consequently, South Africa's exports to the region in 2010 were 20% lower than they would have been if they had been affected to the same degree as other countries. The crowding-out effects are found to be strongest in medium- and low-technology products. Overall, the data suggest that Chinese exports of manufactures have diminished South Africa's participation and economic influence in the region
The middle class and inequality in South Africa
No full textThe high level of inequality in South Africa has added fuel to the debate surrounding the extent to which an African middle class has emerged in South Africa in the past 20 years. This paper analyses changes in income inequality and the composition of the middle class over a 15 year period using data from the 1993 PSLSD and NIDS Waves 1 and 2. The high level of inequality in South Africa makes defining the middle class difficult. In this study we use income decile groups four to seven to define the middle class, groups eight and nine to define the upper class and decile ten describes the top income group
Union selection effects - some inconsistent models
No full textWe show that some of the models which have been used in the South African literature to estimate union selection effects are logically inconsistent. This is a much more serious problem than a failure to identify the coefficient. It implies that the model cannot be true in any possible state of the world. Unfortunately the offending specification is becoming entrenched in the literature
Estimating the short run effects of South Africa's Employment Tax Incentive on youth employment probabilities using a difference-in-differences approach
No full textWhat effect did the introduction of the Employment Tax Incentive (ETI) have on youth employment probabilities in South Africa in the short run? The ETI came into effect on the 1st of January 2014. Its purpose is to stimulate youth employment levels and ease the challenges that many youth experience in finding their first jobs. Under the ETI, firms that employ youth are eligible to claim a deduction from their taxes due, for the portion of their wage bill that is paid to certain groups of youth employees. We utilize nationally representative Quarterly Labour Force Survey (QLFS) data for the period from January 2011 to June 2014, and implement a difference-in-differences methodology at the individual level to identify the effects of the ETI on youth employment probabilities.
Our primary finding is that the ETI did not have any statistically significant and positive effects on youth employment probabilities. The point estimate from our preferred regression is -0.005 and the 95% confidence interval is from -0.017 to 0.006. We thus obtain a fairly precisely estimated 'zero effect'. We also find no evidence that the ETI has resulted in an increase in the level of churning in the labour market for youth. What our results imply is that any decrease in tax revenues that arise from the ETI are effectively accruing to firms which, collectively, would have employed most of these youth even in the absence of the ETI. We conclude with a discussion of some of the policy implications of our findings.JEL Classification: H25, H32, J38The authors acknowledge support from the National Research Foundation’s Human and Social Dynamics in Development Grand Challenge
Youth unemployment and social protection
No full textGlobally and locally, youth unemployment is on the rise, leading the ILO to warn of a “‘scarred’generation of young people” who face low rates of employment and high rates of inactivity (ILO 2013). Policymakers and researchers are exploring ways to address the issue; within the South African context, increasing attention is being paid to social grants and their role in South Africa’s labour market. A controversial subject, grants are often criticised for weakening incentives to work and encouraging welfare dependency. An alternative view is that they have long-term benefits for human capital investment and can facilitate job search and labour migration. Research conducted by SALDRU in rural KwaZulu-Natal and metropolitan Cape Town finds no evidence that the arrival of the state old-age pension, a key social grant in South Africa, has negative labour supply effects. On the contrary, in rural areas it is found to assist unemployed men migrate and find work, provided that job-seekers have completed their high school education
Why corrupt governments may receive more foreign aid
No full textDespite official discourses of donors, the most corrupt countries receive the highest amounts of foreign aid. The most corrupt countries are however also the poorest, and this is why they may receive more aid. This paper provides the first theoretical and empirical grounds for this rationale. The key is that corruption is not exogenous but, instead, an equilibrium phenomenon. We build a multi-country model of optimal aid in which we disentangle the correlation between aid and corruption into two components: the first reflects variations in the quality of institutions and the second variations in productivity levels. The data suggest that both components of the correlation are significant; however the effect of variations in productivity levels is stronger. Because the cross-country heterogeneity in productivity is more important than the heterogeneity in institutional quality, it is optimal to give more foreign aid to more corrupt countries
Wages and wage inequality in South Africa 1994-2011: The evidence from household survey data
No full textWe analyse the long‐term trends in wages in South Africa, using the data from the October Household Surveys, Labour Force Surveys and Quarterly Labour Force Surveys. We show that outliers and missing data need to be taken into consideration when working with these data. Our results show that overall mean real earnings among employees has risen over this period. Median real earnings, by contrast, have lagged. We show that the top end of the earnings distribution has moved away from the median, while there seems to have been a relative compression of the distribution right at the bottom.This paper draws on and extends work reported on in two working papers, Wittenberg and Pirouz (2013) and Wittenberg (2014). Some of the original data work was done with the support of an infrastructure grant to DataFirst from the Redi3x3 project on “Employment/Unemployment, Income Distribution and Inclusive
Growthʺ. The Vice‐Chancellor’s Strategic Fund of the University of Cape Town paid for the initial construction of the PALMS dataset without which this research would not have been possible. The ILO commissioned some of the initial analyses of wage trends, which are reported in Wittenberg (2014). I would like to acknowledge the helpful comments and support from Patrick Belser and Kristen Sobeck in that work