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The policies for reducing income inequality and poverty in South Africa
No full textTrends in inequality, poverty, and redistribution in post-apartheid South Africa have received intense attention especially in terms of measuring inequality and poverty levels and the proximate causes of these levels. We review this literature and find a set of established trends. Inequality levels have increased but the face of inequality has changed with present-day inequality displaying a lessened racial make-up than under apartheid. In contrast, poverty has decreased but is still bears the strong racial makers of apartheid. The labour market continues to drive inequality. A related literature has concentrated on fiscal redistribution in South Africa after the transition, arguing that social policies are well targeted towards the poor with social grants being central in lifting people out of poverty. At the same time, these policies have not succeeded in reversing inequality trends and in providing equal opportunities for all South Africans. To bulk of paper probes this further. We use fiscal incidence analysis to show that redistribution increased slightly since 1993, that this redistribution is higher than in Latin America but far below European levels. Second, looking at spending for all social services we find a mixed picture. There has been an increase in spending since the end of apartheid on social policy and for a number of social policy items in the progressivity of this spending. At the same time, spending has not increased as a percentage of GDP and has become less progressive for social grants. Finally, we examine education policy in more detail. We find that the importance of tertiary education, as a predictor of income has increased considerably whereas individuals with low or incomplete secondary education were worse off in 2008, compared to 1993. Second, we find that state spending on education has increased since the early 1990s. The spending gap between rich and poor provinces has become much narrower but spending equality has not been reached. The academic achievements of students display high inequality, compared to international standards and there is also evidence that the capabilities of students have decreased, rather than increased, suggesting that increased spending has not translated into an increase in the quality of education provision
Re-weighting South African national Household survey data to create a consistent series over time: A cross entropy estimation approach
No full textIn the absence of established longitudinal panel surveys in South African, national cross-sectional household survey data are frequently used to analyse change. When these data are stacked side-byside, however, inconsistencies both in time trends and between household and person level data are found. This study uses a new set of weights calibrated to the ASSA 2003 model totals using a cross entropy estimation approach. This approach is favoured because the calculated weights are similar to the initial sample weights (and hence retain the survey design benefits) but match to a series of age-sex-race and province marginal totals that are consistent over time. The weights are publicly available for a fourteen year period between 1994 and 2007. This is a SALDRU/DataFirst Working Pape
Throwing the book at the CSG
No full textWe estimate the effect of the child support grant on mothers' labour supply in South Africa. Identification is based on the use of specific samples, such as black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off, and unanticipated variation over the years in the age eligibility cut-off. Balancing tests across the age cut-o s are used to show that there are no significant differences between mothers of eligible and ineligible children in the samples used, over the years. Different techniques are used to estimate the effect of the child support grant from many angles, including simple OLS as a bench mark, a difference in difference estimator, using appropriately constructed treatment and control groups, instrumental variables estimates, and descriptive analysis. The effect of having an age eligible child is large. Mothers who become recipients in their twenties see an average increase in employment probability of 15%, and in labour force participation of 9%. Many robustness and specification checks are used, including placebo regressions in the pre-treatment years, to ensure the estimated effect is not due to age or another variable
Rarer Actions: Giving and Taking in Third-Party Punishment Games
No full textIn attempting to understand cooperation, economists have used the methods of experimental economics to focus on spheres of human behavior in which humans display altruism, reciprocity, or other social preferences through giving and through punishment. Recent work has begun to examine whether allowing allocations in the negative domain, that is, allowing subjects to take (or steal) other subjects" endowments, might affect participants" behavior. If participants" behavior is a affected, then our understanding of experimental results generally, and social preferences specifically, should be affected too (List 2007, Bardsley 2008). In this paper we propose an experimental variation on the Dictator Game with third-party punishment (Fehr & Fischbacher 2004b). We examine, first, a basic Dictator Game with third-party punishment, after which we introduce a treatment allowing the dictator to take from the receiver, in the knowledge that the third party could punish them. The results conict. Many dictators choose the most self-interested option, while, when taking is introduced as an option for the dictator, third parties punish the most self-interested option more than in the baseline
The South African unemployment debate: three worlds, three discourses?
No full textThis paper presents a critical survey and meta-analysis of the South African academic literature on unemployment. It asks whether the research has produced a coherent analytical picture. Key elements of seminal contributions are summarised. A number of key themes and findings are identified, as are significant differences relating to subdisciplines but also to epistemology, method and technique (and ideology)
Revisiting the ‘crisis’ in teen births: What is the impact of teen births on young mothers and their children?
No full textoai:localhost:11090/7Reports in the South African media consistently describe an explosion of teenage pregnancies. Yet studies by the Southern Africa Labour and Development Research Unit (SALDRU) at the University of Cape Town show that teen childbearing in the country has decreased from 30% in 1984 to 23% in 2008. The proportion of young teens giving birth has also decreased, with young women aged 18 and 19 accounting for the majority of teen births. However, SALDRU’s research shows that teenage childbearing has a significant impact on the education of teenage mothers, and on the health and education of their children. Young mothers under 17 years are particularly at risk. It is therefore essential to delay the age at which young women first give birth, and to strengthen support services for teenage mothers and their children.This policy brief was developed with assistance from Lake, L. & Smith, C. of the Children’s Institute (UCT), with thanks to Hall, K., Proudlock, P., Jamieson, L., Pendlebury, S. & Meintjes, H. for assistance with the policy implications.William and Flora Hewlett Foundation and
the Population Reference Bureau
Impact of Fertility on Objective and Subjective Poverty in Malawi
No full textThe paper uses data from the Second Malawi Integrated Household Survey (IHS2) to investigate the impact of fertility on poverty in rural Malawi. We use two measures of poverty; the objective and the subjective. After accounting for endogeneity of fertility by using son preference as an instrumental variable, we find that fertility increases the probability of being objectively poor. This effect is robust for all poverty lines used. It is also robust to accounting for economies of scale and household composition as well as assuming that poverty is continuous. We also find that when fertility is treated as an exogenous variable its impact is underestimated. When poverty is measured subjectively, the results are opposite to those of objective poverty. We find that fertility lowers the likelihood of feeling poor, and that fertility is exogenous with respect to subjective poverty
Rural-Urban Differences in Parental Spending on Childrens Primary Education in Malawi
No full textThe paper investigates two issues regarding household expenditure on primary education of own children using the Second Malawi Integrated Household Survey (IHS2) data. Firstly, we look at factors which influence a household"s decision to spend or not (the participation decision), and by how much (the expenditure decision). This is done for urban and rural households. We find that there are differences in the factors which influence both decision levels for the two groups of households. Secondly, to get a deeper understanding of these rural-urban spending differences, the study develops the Blinder-Oaxaca decomposition technique for the independent Double Hurdle model. The proposed decomposition is done at the aggregate and disaggregated levels. The aggregated decomposition allows us to isolate the expenditure differences into a part attributable to differences in characteristics and a part which is due to differences in coefficients. The detailed (disaggregated) decomposition enables us to pinpoint the major factors behind the spending gap. At the aggregate decomposition level, our results show that at least 66% of the expenditure differential is explained by dierences in characteristics between rural and urban households, implying that an equalization of household characteristics would lead to about 66% of the spending gap disappearing. At the disaggregated decomposition level, the rural-urban dierence in household income is found to be the largest contributor to the spending gap, followed by quality of access of primary schools. Besides, rural-urban dierences in mothers education and employment are found to contribute more to the spending differential relative to the same for fathers
Population growth, migration, economic growth and poverty in Gauteng since 1970
No full textTo describe the trends in migration, population growth and urbanization and their effects on the demographics of magisterial districts and to analyze them in relation to levels of poverty and poverty alleviation in the Gauteng Province
Household Economic Status, Schooling Costs, and Schooling Bias Against Non-biological Children in Malawi
No full textThe paper examines the relationship between household income and schooling costs in the presence of intrahousehold schooling bias against non-biological children. To this end, we construct a two-period model of intrahousehold schooling bias. The model predicts that there is an asymmetry in the impact of changes in costs and income on schooling in the sense that the impact is larger for the non-biological child. It predicts that the asymmetry increases as the relationship distance between the non-biological child and the parents gets wider. It also shows that an increase in cost of schooling leads to a bigger reduction in schooling for poor households, and that the dierence in the impact of cost changes between the biological and the non-biological child declines as household income increases i.e. there is convergence. And the convergence is faster the more distantly related to the parents the non-biological child is. An empirical investigation of these predictions using the Second Malawi Integrated Household Survey (IHS2) data, shows that when current enrolment and grade attainment are used to measure schooling, the price and income elasticities of schooling are larger for non-biological children. The results also indicate that households in the lowest income quintile (the poorest) have the largest price elasticities, and households in the highest income quintile (the wealthiest) have the smallest price elasticities. We also find that the price elasticities for biological and non-biological children converge as we move from the lowest income quintile to the highest income quintile, and that the convergence is faster for non-biological children who are non-relatives