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Finite-Sample Bias and Inconsistency in the Estimation of Poverty Maps
No full textI argue that the estimation technique - widely used in the poverty mapping literature - introduced by Elbers, Lanjouw and Lanjouw, is highly sensitive to specification, severely biased in finite samples, and almost certain to fail to estimate the poverty headcount consistently. First, I show that the specification of the first-stage model of household expenditure strongly influences the estimated headcount; the range of obtainable estimates is on the order of 20% for many districts, and is as high as 48% for some areas. Further, some specifications imply province-level headcounts which diverge from the direct estimates by many as six standard deviations. Secondly, I construct bootstrap confidence intervals for the difference between the estimates under alternative specifications, which shows that (at a 2% level of significance) finite sample-bias is present in more than 42% of districts in even the best-performing regions. I calculate approximate lower bounds for the bias; I find it to be on the order of 3% for most areas, but the lower bounds range as high as 19.6% in some provinces. Finally, I argue that consistent estimation of the first stage model is necessary for consistent second-stage imputations and I decompose the difference between the true and estimated headcount into a sampling component and a specification component, the latter of which is asymptotically persistent. Given these results, it appears that the poverty maps estimated by this technique reflect primarily the arbitrary and unexamined methodological choices of their authors rather than robust features of the data
Migration: Analysis of the NIDS Wave 1 Dataset
No full textThis paper investigates measures of migration captured in the National Income Dynamics Study (NIDS), and it compares these measures, and how information is collected, with other household surveys conducted in South Africa. The paper is divided into five sections. The first section describes households with non-resident (or absent) household members. A key reason why individuals may be absent from a household for much of the year is because they are migrant workers. The second section therefore looks specifically at households which report migrant workers as absent household members. Section three describes inter-household transfers received by households, and it considers the relationship between households that report transfers and households that report migrant workers. The fourth section investigates migration more generally as the movement of people across space and the change in an individual’s place of residence. The last section summarises the main similarities and differences between NIDS and other household surveys in South Africa
Household responses to adverse income shocks: Pensioner out-migration and mortality in South Africa
No full textHow do poor households respond to the cessation of cash transfers in developing countries? South Africa"s generous social pension system results in most of the poor elderly being the primary "breadwinner" in the household. I estimate the magnitude of the changes in household composition and labour force activity amongst the resident members of the household, that correlate with a pensioner leaving the household. I use nationally representative matched panel data from several waves of the South African Labour Force Surveys. Compositional changes include the out-migration of school-aged children, and in-migration of middle aged females and older adults of either gender. More than 1 in 4 losing households get an additional older adult. For people who maintain their residency status across waves, I nd large and statistically signi cant increases in employment rates for middle aged females and males (9.3 and 8.1 percentage points in each case), as well as for older adult females and males (10.3 percentage points in each case). For middle aged adults, this is not accompanied by a corresponding increase in labour supply
Weighing the value of asset proxies: The case of the body mass index in South Africa
No full textThere are many household surveys, e.g. the Demographic and Health Surveys, that carry a wealth of useful information but in which information of interest to economists, chiefly or missing altogether. In many of these surveys, however, there are questions about asset ownership. These might be used to proxy for income. Indeed some authors have suggested that asset-based measures of wellbeing may even be better than income or expenditure-based ones, since they may reflect of the household better. They may also be more accurately measured (Filmer and Pritchett 2001, Sahn and Stifel 2003). 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 Labour Supply Effects of the South African State Old Age Pension: Theory, Evidence and Implications
No full textThis paper examines the impact of South Africas state old age pension on the labour supply of working age members of pension-receiving households. A range of identification strategies are employed in an attempt to make full use of recent labour force survey data. Results suggest fairly modest, negative impacts on participation and employment on average, but a pronounced, positive migration impact. As such, they marry the results of Bertrand, Mullainathan and Miller (2003) and Posel, Fairburn and Lund (2006), using more recent (and nationally-representative) data. Concluding sections consider implications, and question whether gender-differentiated effects are grounds for rejecting the income-pooling hypothesis
Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis
No full textThis paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule
Education and youth unemployment in South Africa
No full textThe problem of high youth unemployment is a global phenomenon. According to an International Labour Office study in 2004, youth (15-24) make up nearly half (47%) of the world"s unemployed, 88 million out of 186 million, even though youth are only 25% of the world"s working age population. Of the world"s 550 million working poor who cannot lift themselves above US 2.2 trillion, 4% of global GDP. These statistics lend weight to the notion that youth unemployment is a problem worthy of attention. In addition, one may argue that addressing unemployment in general would also lower poverty levels and add to GDP (World Bank 2006)
Identfying Pure-Income Effects in an Empirical Model of Labour Supply: the case of the South African Social Pension
No full textThis paper investigates the income effects of the South African Social Pension. Using data from three waves of the the Labour Force Survey, we find that there appears to be a significant negative association between labour supply and pension receipt. However, we find little evidence to support the view that these results can be interpreted as pure income effects. Rather, the evidence suggests that the association is driven by age-cohort effects, which we argue reflects the burden of living with the elderly. We also report preliminary evidence which is suggestive of endogenous household formation in response to eligibility for the social pension.Katherine Eyal is a Doctoral Candidate, Department of Economics, Hebrew University and Malcolm
Keswell is an Associate Professor, Department of Economics, Stellenbosch University and Honorary
Research Associate, SALDRU, School of Economics, University of Cape Town. We thank Justine
Burns, David Lam, Murray Leibbrandt and Martin Wittenberg for useful comments and discussions.
Support for this research was provided by the U.S. National Institute of Child Health and Human Development
(Grant R01HD045581). Comments can be sent to [email protected]
A tapestry of people: The growth of population in the province of the Western Cape
No full textThe best place to begin a study of human settlement is with climate. Most of the Western Cape province - the land lying north of a line running parallel to the southern coast approximately 100 kilometers inland, from Worcester to Uniondale - is too dry for arable farming. And the rain which does fall south of the long range of mountains tends to come in the winter months which is suitable for wheat but not for tropical cereals. Thus when ironworking, Bantu-speaking, people began to move east and then south from the Niger-Congo area in a great wave of migration that began some 2000 years ago they moved into the wetter eastern part of what is now South Africa where there was good grazing for their cattle and where the crops they knew - sorghum, millet and, later maize, - would grow..
Orphanhood and schooling in South Africa: Trends in the vulnerability of orphans between 1993 and 2005
No full textUsing 11 nationally representative surveys conducted between 1993 and 2005 this paper assesses the extent to which the vulnerability of orphans to poorer educational outcomes has changed over time as the AIDS crisis deepens in South Africa. This paper seeks to establish whether the fear that extended families are no longer effective safety nets may be overstated or whether traditional coping strategies are indeed breaking down. Patterns of care giving for orphans do appear to be shifting over time but these changes are taking place within the extended family safety net. Orphans are still absorbed into extended families but single orphans are increasingly less likely to live with the surviving parent and there is an increasing reliance on grandparents as caregivers. At every point in time cross-sectional evidence suggests that orphans are at risk of poorer educational outcomes with maternal deaths generally having stronger negative effects than paternal deaths. Paternal deaths are strongly associated with poorer socio-economic status and much of the deficit experienced by children who have lost a father is explained by the relative poverty of their current household. In contrast maternal deaths appear to be directly associated with poorer schooling outcomes rather than channelled through socio-economic status. The results in this paper suggest that parental involvement and relatedness to the household are among the multiple pathways through which parental death affects a child"s schooling. Despite a significant increase in the number of orphans over the last decade this paper finds no evidence of a systematic deterioration in traditional coping strategies with respect to orphan"s educational outcomes