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What"s in a name? Racial identity and altruism in post-apartheid South Africa
No full textThis paper reports the results of an economic experiment which was designed to test the effect of racial identity on generosity in a non-strategic setting. A sample of undergraduate University students was recruited to participate in a Dictator game, where surnames of individuals were revealed to convey information about racial identity. Results indicate that compared to a set of control experiments where participant identity was kept anonymous, revealing racial identity has a significant and positive impact on the size of the offers made. However, while Black participants did not vary their offers based on the racial identity of their partners, White participants were more generous towards White partners than Black partners, exhibiting insider favouritism in their offers
The Car Guards of Cape Town: A Public Good Analysis
No full textCar guards have become a part of everyday life for drivers in Cape Town and other metropolitan centres around South Africa. This paper analyses the development and economic functioning of the industry with the understanding that the market exhibits quasipublic good characteristics. Some unusual phenomena are explored. Firstly free riding does not lead to under-provision in the market due to the survivalist nature of the supply, the noncontractual nature of the demand and varied public perceptions. Secondly private firms enter the market as a signalling device for the heterogeneous quality of car guards. Lastly drivers continue to pay car guards in the face of free riding due to varied preference curves and a degree of altruism in rational agents. Twenty detailed case studies are undertaken and the results presented and used to inform the theoretical conclusions made throughout the paper
The basic homework on basic income grants in South Africa
No full textCertain admirable people are campaigning for the institution of a basic income
grant (BIG) in South Africa as the main policy to combat poverty. In a number
of respects their arguments are persuasive, but alas, good intentions and good
credentials alone are not enough. Prior research is essential before an informed
decision is possible concerning the wisdom of such a large and ongoing transfer
of resources. That research has not been completed yet, nor initiated in some
instances
Labour market transitions in South Africa: What can we learn from matched Labour Force Survey data?
No full textWe generate a longitudinal dataset using the rotating panel component of the nationally representative Labour Force Surveys from 2001 to 2003. We then estimate the transition probabilities across different labour market states over a six month period. We find that unemployed searchers are more likely to find employment than the non-searching unemployed. Informal sector workers are more likely to find formal sector employment than the searching unemployed. Whites are more likely to find and remain in formal sector jobs. However, some part of the Black-White unemployment gap arises from unemployed Whites leaving the labour force at a higher rate
Examining the Degree of Duration Dependence in the Western Cape Labour Market
No full textThis paper investigates the effects of long bouts of unemployment on the employment probabilities of the unemployed, and the factors affecting unemployment duration. This is achieved through the estimation of the hazard rate. The parametric analysis was conducted using a Weibull regression model. The Weibull estimates indicate that long term unemployment will be more prevalent for young women who care for dependents aged below 16 years, have no grade 12 or tertiary qualifications and have limited proficiency in English. This effect is compounded when the unemployed are marginalised and live with few or no wage earners. Slight positive duration dependence was found, indicating that employment probabilities do not decrease as unemployment duration increases. A graphical depiction of the Weibull hazard indicates that the hazard is initially upward sloping, reaching a maximum at approximately 13 months of unemployment, at which point it declines steeply. At the 13 month turning point, merely 17 percent of respondents have exited from unemployment. Even at its highest, the hazard remains below 8 percent. A piece-wise model was estimated which confirmed the Weibull estimates, but indicated that the hazard follows a more flexible shape and is not monotonic in nature
Suggestions for the Education Module of the South Africa National Income Dynamics Study
No full textThere can be little question that education plays a fundamental role in income dynamics, and that it should be an important focus of the National Income Dynamics Study. In preparing this document, we have been motivated by two basic questions. First, what are the key research and policy questions related to education in South Africa, especially in relation to income dynamics? Second, what dimensions of education are particularly well suited to analysis using longitudinal data of the type that will be collected in NIDS
Flogging a dead horse: Attempts by van der Berg et al to measure changes in poverty and inequality
No full textThis paper seeks an explanation for the large differences in the extent and severity of poverty published respectively in van der Berg et al (2005: 2007a) and Meth (2006b). Headcounts in 2004 suggested by van der Berg et al (2007a) exceed by five million, those reported by (Meth, 2006b). Household survey respondents often under-report income (and expenditure). To address this, it is common (if not necessarily wise) to scale household survey income means until the grossed-up survey income totals are approximately the same as those yielded by the national accounts. The apparent reason for the differences between our respective poverty estimates lies in the poor quality of the income estimates in the surveys used by van der Berg et al as primary data source for estimating income distributions (by race). Scaling these survey estimates to make them consistent with the national accounts, it is argued, causes them to under-estimate the extent and severity of the poverty problem. As part of their analysis of changes in the welfare of Africans in South Africa since the advent of democracy (and in support of their claim that poverty has fallen), van der Berg et al attempt to measure changes in the racial shares of remuneration. The present paper ends with a brief examination of some of the problems of doing so using Statistics South Africa household surveys (the Labour Force Surveys) as primary data source. Welcomed by government because of the apparent progress they report in the fight against poverty, the possible consequences for anti-poverty policy (and for the poor) of the van der Berg et al figures being wrong are non-trivial
Surveying Commercial & Subsistence Agriculture
No full textAt the last count agriculture employed twice as many people as the mining sector and about four fifths of the number employed in the manufacturing sector. Together with domestic work, farm work is often seen as employment of last resort, a quasi-formal sector on the fringes of respectability. Much has been done since 1994 to improve job security, working conditions and, since 2003, pay for farm workers, but inadequate farm data allow only the sketchiest tracking of this process. Income dynamics in agriculture are important for various reasons : On the commercial side, farming has put been under pressure by falling product prices in a global market and rising costs of production (Barrientos & Kritzinger, 2004). For land reform reasons it is important to know if commercial farming is viable. At the same time workers are supposed to have benefited from farm labour market reforms, but with a few small exceptions (Du Toit & Ally, 2003; Conradie, 2007) we simply do not know to what extent this has happened. On the subsistence side, ASGISA has identified agriculture as a key industry in the second economy (Mlambo-Ngcuka, 2006). We need good baseline data on subsistence agriculture and ongoing collection of reliable statistics to monitor the success of this initiative
Labor supply responses to large social transfers: Longitudinal evidence from South Africa
No full textIn many parts of the developing world, rural areas exhibit high rates of unemployment and underemployment. Understanding what prevents people living in rural areas from migrating to find better jobs is central to the development process. This issue is especially salient in South Africa, where differences in earnings and employment rates between rural and urban areas are large and persistent (Chamberlain and van der Berg 2002; Leite et al. 2006; Banerjee et al. 2007). In this paper, we examine whether binding credit constraints and childcare constraints limit the ability of households to send labor migrants, and whether thearrival of a large, stable source of income-here, the South African old-age pension-helps households to overcome these constraints