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Skills mismatch and informal sector participation among educated immigrants: Evidence from South Africa
No full textUsing South African census data, we show that immigrants with tertiary education from different origin country groups differ in their likelihood of obtaining a skilled job. Immigrants from advanced country groups outperform native internal migrants, while those from many African country groups underperform them. Immigrants with advanced degrees from certain country groups are also more likely to be employed in unskilled, informal sector jobs. Variation in outcomes across origin country groups is smaller at higher levels of education. We further explore characteristics of origin country groups correlated with immigrant outcomes. Our results suggest under-utilization of immigrant skills, which has particular implications for emerging economies grappling with skills shortages.JEL Classification: F22; H52; J24; O2
South Africa’s evolving political settlement in comparative perspective
No full textIn a dramatic few years, South Africa shifted from being trapped in an apparently intractable conflict between a dominant white minority and an oppressed black majority to being a democratic state with an outstanding progressive liberal constitution. It moved from being the epitome of racial conflict to a model of peaceful transition. And yet, twenty years later, the cracks in the settlement are all too clear and the risks of internal conflict are growing. The transition is truncated.The paper was prepared under the umbrella of the DFID-funded and University of Manchester-led global comparative Effective States and Inclusive Development (ESID) research program – South Africa is one of the countries targeted for comparative ESID research -- as an analytical platform for more in-depth, targeted research. The ESID program has provided funding for in-depth research on the politics and governance of basic education in South Africa, and for research on business-state relations in South Africa (both part of a broader multi-country comparative study); and for some initial case studies on the politics and governance of infrastructural state-owned enterprises. We thank Anthony Black, Dave Kaplan and Nicoli Nattrass for their helpful comments
Information, mobilization, and demand for redistribution: A survey experiment in South Africa
No full textThis paper presents a survey experiment in South Africa that focuses on the role of mobilization for demand for redistribution. Previous literature has found that providing information on inequality raises concerns about inequality but need not lead to a change in tax preferences. We argue that mobilization might provide the missing link between information and political behavior regarding demand for redistribution. We operationalize mobilization from an individual perspective as the belief that a decrease in inequality is feasible. If this belief is absent, information about inequality might simply increase the pessimism of respondents and remain inconsequential for policy preferences. We test this idea with a survey experiment in two townships of Cape Town, which includes one pure information and two mobilization treatments. The first mobilization treatment informs respondents about the (much lower inequality) in neighboring countries. The second provides elite support for redistribution via video messages of South African leaders. Consistent with previous literature, we find that pure information on inequality increases concern for inequality but has no effects on tax preferences. Mobilization treatments, in contrast, shake the belief that a decrease in inequality is feasible and consequently lead to a change in tax preferences. While the mechanism regarding information on lower inequality in neighboring countries is as expected, the one for the videos is puzzling: videos make people believe that inequality is more, instead of less, inevitable, and this leads to lower tax preferences. We conjecture that this is due to a lack of credibility of the leaders considered which makes viewers more pessimistic and has a demobilizing effect. An important innovation of the survey experiment is action outcomes where respondents are offered to send an SMS or sign a petition to disseminate their tax preferences.Miquel Pellicer: GIGA Hamburg and SALDRU, University of Cape Town
Patrizio Piraino: School of Economics and SALDRU, University of Cape Town
Eva Wegner: GIGA Hamburg and SALDRU, University of Cape Town. Corresponding Author: eva.wegner@ giga-hamburg.de.
We would like to acknowledge the funding of the EU’s Seventh Framework Programme through the "NOPOOR - Enhancing knowledge for renewed policies against poverty” project.
We would also like to thank the participants at the 2014 Toronto Political BehaviourWorkshop, of the panel on redistribution at the EPSA Annual Meeting (2014), and at the UNU-WIDER conference on \Inequality
measurement, trends, impacts, and policies” for helpful comments. We would also like to thank Jan Schenk for his feedback on our questionnaire and treatment design throughout this project
Randomised trials for policy: a review of the external validity of treatment effects
No full textThe paper provides a first survey of the literature on external validity. The starting point for this are debates regarding the use of randomised evaluations to inform policy. Besides synthesising contributions to the programme evaluation literature we consider definitions of external validity from other subdisciplines within economics, such as experimental economics and the time-series forecasting literature, as well as the disciplines of philosophy and medicine. We suggest - following Cook and Campbell (1979) - that the fundamental challenge arises from interactive functional forms. This somewhat neglected point provides a framework in which to understand how and why extrapolation may fail. In particular it suggests that replication cannot resolve the external validity problem unless informed by some prior theoretical understanding of the causal relationship of interest. Finally, we argue that the assumptions required for simple external validity are conceptually equivalent to those required for obtaining unbiased estimates of treatment effects using non-experimental methods, undermining the idea that internal validity needs be rigorously assessed whereas external validity can be ascertained subjectively. Theory may play a role in aiding extrapolation, but the extent to which this will be possible in practice remains an open question
The impact of Cigarette Excise Tax Increases and Harmonisation in the East African Community
No full textThis paper proposes a model that can be used to predict the likely impacts of tobacco tax increases and harmonisation in the East African Community. The model has five sections, one for each EAC country. These sections consider different cigarette market segments based on tax or price differentials. The model can therefore calculate the likely effects of excise tax increases and harmonisation on the retail selling price of cigarettes, cigarette consumption, government revenue and industry revenue for each individual country and for the EAC as a whole.
Two Scenarios are presented in this paper. Scenario 1 explores an increase in the current excise tax rates and a harmonisation across the EAC of a uniform specific tax of UDS 0.60. A sensitivity analysis is conducted to assess the robustness of the assumptions in this scenario. Scenario 2 discusses the use of a mixed tax structure with a specific excise tax of USD 0.60 or an ad valorem excise tax of 40% of the retail selling price, whichever is higher. The advantages and disadvantages of a uniform specific excise tax and other tax structures such as tiered specific taxes, ad valorem taxes and mixed tax structures are explored. Factors such as administrative ease, predictability of revenue flows, inflation and income growth are discussed. A uniform specific tax is shown to be the most preferable excise tax structure, even over a mixed tax structure.
The results show that, with an assumed price elasticity of demand of -0.6, as excise tax is increased in the region, consumption decreases and government revenue increases. Scenario 1 shows a decrease in consumption by around 2.3 billlion cigarettes, or 18%, compared to current consumption levels across the EAC of around 12.9 billion cigarettes. Scenario 2 shows a slightly higher decline in consumption of 2.7 billion cigarettes or 21%. In terms of government excise revenue, Scenario 1 shows an increase of around USD 140 million or 80% from the current government revenue of around USD 176 million across the EAC. The second scenario reveals an even greater increase of USD 173 million or 98%. These results show that excise tax increases and harmonisation will contribute to public health and financial objectives of governments in the region.We would like to acknowledge the Bill and Melinda Gates Foundation, through the American Cancer
Society, for funding this research.
Economics of Tobacco Control Project, Southern Africa Labour and Development Research Unit, School of
Economics, University of Cape Town, South Afric
Progress through school and the determinants of school dropout in South Africa
No full textThe release of the National Income Dynamics Study Wave 2 provides the first nationally representative longitudinal data collected in South Africa, making it possible to study transitions in and out of school, across grades and into work, in ways not previously possible. We illustrate the high levels of grade repetition evident in South African schools and show how school completion presents a significant hurdle with very few youth successfully matriculating. Exit from school does not offer any advantages as most youth find themselves idle once they have left school. Our regression analysis investigates correlates of school dropout and shows that falling behind is a key determinant of school dropout, even after controlling for school quality and socio-economic status. Those behind but attending higher quality schools are partially protected from dropping out. Some evidence that credit constraints may be related to dropout is found, especially among males
Pauvreté et corruption: un cercle vicieux
No full textAprès avoir dressé une typologie de la corruption, cet article en analyse les implications pour les dépenses publiques et la croissance. Il montre également comment l’environnement économique, institutionnel et politique des pays à faible revenu favorise la corruption, perpétuant ainsi le cercle vicieux pauvreté-corruption au niveau des États.
After having established a typology of corruption, this article analyses its implications for public spending and growth. It also shows how the economic, institutional and political environment of low-income countries favours corruption, thus perpetuating the vicious circle between poverty and corruption at the state level
What Do People Actually Learn from Public Health Campaigns? Incorrect Inferences About Male Circumcision and Female HIV Infection Risk Among Men and Women in Malawi
No full textQualitative studies and polling data from sub-Saharan Africa indicate that many individuals may mistakenly believe that male circumcision directly protects women from contracting HIV. This study examines whether individuals who learn that male circumcision reduces female-to-male HIV transmission also erroneously infer a reduction in direct male-to-female transmission risk (i.e. from an HIV-positive man to an uninfected woman). We used data on Malawian men (n = 917) randomized to receive information about voluntary medical male circumcision (VMMC) and HIV risk in 2008 and a random sample of their wives (n = 418). We found that 72 % of men and 82 % of women who believed that male circumcision reduces HIV risk for men also believed that it reduces HIV risk for women. Regression analyses indicated that men randomly assigned to receive information about the protective benefits of circumcision were more likely to adopt the erroneous beliefs, and that the underlying mechanism was the formation of the belief that male circumcision reduces HIV risk for men. The results suggest the need for VMMC campaigns to make explicit that male circumcision does not directly protect women from HIV-infection
Getting ahead or falling behind: Findings from the second wave of the National Income Dynamics Study
No full textThe National Income Dynamics Study is the first national panel study of South African individuals. Its objective is to track these individuals over time to study social mobility. This paper documents the survey design and a successful recontact record in Wave 2 before providing an overview of the key findings from the other papers in this issue of the journal. Those from the top of the income distribution were hardest to recontact. The papers show that average real incomes grew slightly between 2008 and 2010. However, life satisfaction and expectations of future upward mobility declined. Being unemployed and moving into unemployment is associated with the lowest level of life satisfaction. Aggregate employment did not decline much but there was significant labour-market churn. The National Income Dynamics Study data reveal high levels of grade repetition and a slow transition from school to work. Relocating is shown to be an important part of schooling and employment decisions
New evidence on subjective well-being and the definition of unemployment in South Africa
No full textAccess to new nationally representative, individual-level panel data from South Africa has allowed for the revalidation of Kingdon and Knight's discussion on the definition of unemployment. This paper investigates subjective well-being as a measure of comparison between labour-market statuses. It finds that on the grounds of subjective well-being the non-searching unemployed (or ‘discouraged’) are significantly worse-off than the not economically active. Moreover, evidence suggests that, with regard to the relationship between life satisfaction and labour-market status, the non-searching unemployed consistently are the worst-off. This is especially true of both the young and senior non-searching unemployed; however, the findings are largely driven by the African subsample. This paper does not advocate for a change in the official definition of unemployment but does advocate for the inclusion and recognition of the non-searching unemployed in policy relating to labour and development in South Africa