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Wage Subsidies to Combat Unemployment and Poverty: Assessing South Africa's Options
No full textWage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this countrys massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africas particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economys employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth
The Evolution and Impact of Unconditional Cash Transfers in South Africa
No full textAt the time of the transition to democracy in 1994, the South African social security system was already notably well developed for a middle income country (Lund 1993; Van der Berg 1997; Case and Deaton 1998). This fact can be ascribed to the way in which the system developed under apartheid as a welfare state for whites which was then incrementally expanded under social and political pressure to incorporate other groups. Thus, at the advent of the new post-apartheid society some important planks for a social assistance system were in place. Since then, a set of policies have been implemented that have expanded this system substantially. Direct spending on cash transfers currently stands at 3.5 percent of GDP. This is more than twice the median spending of 1.4 percent of GDP across developing and transition economies (World Bank 2009).This paper was prepared for the Annual Bank Conference in Development Economics (ABCDE) in
Stockholm, 31 May - 2 June 2010. Ingrid Woolard gratefully acknowledges support from the World Bank
and the UK Economic and Social Research Council (RES-167-25-0076). Murray Leibbrandt gratefully
acknowledges support from the Research Chairs Initiative of the Department of Science and Technology
and National Research Foundation
Measuring the impact of educational interventions on the academic performance of Academic Development Students in second-year microeconomics
No full textThis paper analyses the impact of educational interventions made in the first- and second-year microeconomics courses on academic development students final mark in the second-year course. It also addresses issues of methodology, specification, and statistical analysis with respect to other studies in the field. The results suggest that the educational interventions in the first-year had a positive impact on the academic performance of the academic development cohort, relative to the mainstream cohort for the first period (2000-2002). The results also suggest that the educational interventions introduced in the second period (2003-2005), in the form of voluntary workshops for the academic development cohort, also improved the academic performance of this cohort relative to that of mainstream students
Key Issues in the Assessment of Seta Performance in South Africa's National Skills Development Strategy.
No full textOne of the most dangerous aspects of the global knowledge-based economy lies in the tensions created by the growing knowledge gap between the knowledge-rich countries of the North and the (generally) knowledge-poor countries of the South. Wealth creates the ability to create the knowledge that can be used to create further wealth. But, without adequate means to distribute the benefits accruing from such knowledge, social disparities, and the jealousies they invoke, will only increase. Editorial, Nature 6714, 1999: 1
Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa
No full textWhat happens when a previously uncovered labor market is regulated? We exploit the introduction of a minimum wage in South Africa and variation in the intensity of this law to identify increases in wages and formal contract coverage, and no significant effects on employment on the intensive or extensive margins for domestic workers. These large, partial responses to the law are somewhat surprising, given the lack of monitoring and enforcement in this informal sector. We interpret these changes as evidence that external sanctions are not necessary for new labor legislation to have a significant impact on informal sectors of developing countries, at least in the short-run
Sexual Risk Taking Among Young Adults in Cape Town: Effects of Expected Health and Income
No full textThe wide prevalence of HIV in Africa has long been associated with seemingly irrational levels of sexual risk taking. Hence understanding the rationale behind risky sexual behavior is critical for designing effective prevention policies. This paper empirically assesses links between expectations of future health and income on sexual risk taking. An important contribution of the paper lies in combining a wide range of variables measuring risky sexual behavior such that the maximum information possible is extracted from, and adequate weights are attached to each measure, as opposed to previous studies that are based on individual measures or arbitrary aggregations. The findings indicate that expected income and health and future uncertainty are significant determinants of current patterns of sexual risk taking. From a policy perspective, the results suggest that reducing poverty and improving social insurance as well as reducing the taboo related to talking about HIV, and further investigating the relatively low degree of condom use of women may constitute important issues to be addressed
Parental loss and schooling: Evidence from metropolitan Cape Town
No full textThis paper makes use of the Cape Area Panel study (CAPS), a longitudinal study of youth and their families in metropolitan Cape Town in order to broaden the empirical body of evidence of the causal impact of parental death on childrens schooling in South Africa in two dimensions. First, analysis of CAPS allows us to examine the extent to which results may generalize across geographically and socioeconomically distinct areas. Second, CAPS allows for an explicit exploration of whether the causal impact lessens as time since the parental death lengthens. Evidence from the CAPS is consistent with that from a large demographic surveillance site in rural KwaZulu-Natal in supporting the findings that mothers deaths have a causal impact on childrens schooling outcomes and that there is no evidence of a causal effect of paternal loss on schooling for African children. The loss of a father has a significant negative impact on the education of coloured children but a significant amount of this impact is driven by socioeconomic status. We exploit the longitudinal data to investigate the extent to which orphan disadvantage precedes parental death and whether orphans begin to recover in the period following a parents death or whether they continue to fall behind. We find no evidence of orphan recovery in the period following their parents death and results suggest that negative impacts increase with the time since the parent died. The longer-run impact of parental death in childhood is also evident in an analysis of the completion of secondary schooling by early adulthood. These results suggest that parental death will reduce the ultimate human capital attainment of the child
Sample Survey Calibration: An Information theoretic perspective
No full textWe show that the pseudo empirical maximum likelihood estimator can be recast as a calibration estimator. The process of estimating the probabilities pk of the distribution function can be done also in a maximum entropy framework. We suggest that a minimum cross-entropy estimator has attractive theoretical properties. A Monte Carlo simulation suggests that this estimator outperforms the PEMLE and the Horvitz-Thompson estimator.
This is a joint SALDRU/DataFirst Working Paper as part of the Mellon Data Quality Project.
For more information about the project visit www.datafirst.uct.ac.za
The effects of the Kalamazoo Promise on college choice
No full textTo the surprise of the residents of Kalamazoo, Michigan, the Kalamazoo Promise was announced on November 10, 2005. Fully funded by anonymous donors, the Kalamazoo Promise offers to pay both the tuition and mandatory fees of graduates of Kalamazoo public high schools at any public college or university located in Michigan. To be eligible for the scholarship program students must graduate from a Kalamazoo public high school, reside in the school district, and have been enrolled in the Kalamazoo Public School (KPS) district for four years or more. Enrollment and residency must be continuous to be eligible for the nancial support. Students must gain admission to and enroll in a public State of Michigan community college, or four-year college or university. They must make regular progress toward a degree or certi cation and maintain a 2.0 grade point average at their postsecondary institution. Students must complete a minimum of 12 credit hours per semester, and if their cumulative grade point average drops below 2.0, they lose the funding, but it may be reinstated if the student is able to bring her grade point average up to at least a 2.0
Estimating expenditure impacts without expenditure data using asset proxies
No full textWhen asset indices are used in regressions the coefficients obtained are typically difficult to interpret. We show how lower bounds on expenditure effects can be extracted, if the relationship between the assets and expenditure can be calibrated on an auxiliary data set