Wave 3 Discussion Papers

Please note that the papers are in pdf format.  You will need to view them with Adobe Acrobat.

NIDS Discussion Paper 2013/01

Title:  The Dynamics of Poverty in the First Three Waves of NIDS  video

Author(s): Arden Finn and Murray Leibbrandt

Date:  2013

We use the first three waves of data from the National Income Dynamics Study (NIDS) to analyse poverty dynamics in South Africa between 2008 and 2012. Restricting ourselves to the sub-sample of balanced panel respondents, we find that poverty exit rates increased with time, though a substantial proportion of the population was trapped in severe poverty, defined as having income of less than half of the poverty line. The importance of demographic events in the household as drivers of poverty transitions are highlighted in a univariate and multivariate setting. Finally we look at the joint distributions of multidimensional poverty and income poverty in order to ascertain the extent to which they complement or offset one another.

NIDS Discussion Paper 2013/02

Title:  Mobility and Inequality in the First Three Waves of NIDS

Author(s):  Arden Finn and Murray Leibbrandt

Date:  2013

How much income mobility was there in South Africa between 2008 and 2012? Did this mobility serve to equalise or disequalise longer-term measures of income? In this paper we address the first question by assessing the extent of absolute and relative economic mobility. We then turn our attention to the second question of the joint relationship between mobility and inequality, and implement a new measure that is designed to reveal just how equalising or disequalising mobility has been. We find that there was a lot of absolute and relative mobility in the period covered by the first three waves of NIDS, and that this mobility served to equalise longer-term incomes slightly.

NIDS Discussion Paper 2013/03

Title:  Earnings volatility in South Africa

Author(s):  Vimal Ranchhod

Date:  2013

How much volatility is there in earnings in South Africa? The South African labour market has been shown to be a key determinant of welfare, both in terms of poverty and inequality. These are a function of both the high levels of unemployment as well as the wage distribution, conditional on being employed. One aspect of welfare that derives from the labour market, which has been relatively understudied to date, is the amount of volatility in earnings that various groups of South Africans experience over time. This has implications directly for welfare, as well as for inequality. We make use of the first three waves of data from the National Income Dynamics Study to describe the amount of earnings volatility experienced by different demographic groups. We then make use of a regression model to estimate the partial correlation between the various characteristics that we use and earnings volatility. Our main findings are that earnings volatility is high over a four year interval. The mean within‐person standard deviation in earnings across the three waves lies between 50% and 66% of the mean earnings depending on the time period, and the mean within‐person coefficient of variation in earnings is 0.641.

NIDS Discussion Paper 2013/04

Title:  Rural Livelihoods in South Africa

Author(s):  Reza C. Daniels, Andrew Partridge, Dineo Kekana and Sibongile Musundwa

Date:  2013

This paper discusses the changing profile of rural livelihoods in South Africa using the National Income Dynamics Study Waves 1 – 3 data (Southern Africa Labour & Development Research Unit (SALDRU), 2013a, 2013b, 2013c). The rural sector is undergoing a form of compositional change, with the literature suggesting that a phenomenon of de-agrarianisation is taking place as households become more dependent on government grants while moving away from agricultural-based activities. Furthermore, Tribal Authority Areas (TAAs) retain a communal form of land tenure that implies very different social and behavioural norms in these areas compared to formal rural areas. We find that there are indeed very different labour market, migration and subsistence agricultural trends between TAAs and formal rural areas. For the rural sector in general, selected findings include that rural migrants who have moved to urban areas between 2008-2012 have a higher probability of being employed than rural stayers; that among the employed population, the major transition out of agriculture was to the transport, storage and communication sector while the major transition into agricultural employment was from the wholesale & retail sector; and finally that there is indeed evidence that de-agrarianisation is taking place in the NIDS rural sample, with individuals much more likely to transition out of either commercial or subsistence agricultural activities than to start doing these activities.

NIDS Discussion Paper 2013/05

Title:  Food expenditure patterns in South Africa:  Evidence from the NIDS

Author(s):  Vukile Mhlongo and Reza C. Daniels

Date:  2013

This study evaluates food expenditure patterns in South Africa using the Engel framework which states that proportions spent on food fall with income. Non-parametric methods are used to estimate Engel curves, and regression analysis to evaluate the effects of several variables on shares of total expenditure on food using the Working-Leser model. Pooled OLS is used to compare the exposure and sensitivity to changing expenditure capacity between waves. We find that households were spending proportionally less on food in 2008 compared to 2010 and 2012 and that food is the most important item of expenditure in most households by looking at budget shares. The sensitivity of the share of total expenditure dedicated to food varies with expenditure capacity. The effect of food price inflation on all households in South Africa is conjectured to contribute markedly to this trend, though we cannot confirm that hypothesis with NIDS data alone. The implications for food security is fertile ground for further research on this issue.

NIDS Discussion Paper 2013/06

Title:  Educational expenditure in South Africa:  Evidence from the National Income Dynamics Study

Author(s):  Nicola Branson, Dineo Kekana and David Lam

Date:  2013

Differential education expenditure by racial group was a pillar in the architecture of apartheid. School systems diverged by racial group, with large funding and curriculum differences (Fiske and Ladd, 2004). In 1994, spending on white learners was about 1.5 times the spending on urban African learners and more than four times the spending on rural African learners (Fiske and Ladd, 2004). Since 1994 much focus has been paid by government to redress these educational expenditure inequalities with policies such as the National Norms and Standards for School Funding (NNSSF) and the rollout of the no fee schools program disproportionately allocating state funds to low socioeconomic schools and the fee‐exemption policy providing low income households and grant recipients access to free education. Little is however known about how these policies have affected household educational expenditure across the income distribution.

NIDS Discussion Paper 2013/07

Title:  School Enrolment and the Child Support Grant: Evidence from South Africa

Author(s):  Katherine Eyal and Ingrid Woolard

Date:  2013

The extension of the Child Support Grant in South Africa to all children aged 17 or under gives the opportunity to evaluate this type of social transfer and its effect on school enrolment. Using exogenous variation in the fraction of life exposed to the grant, we find the grant is associated with a higher probability of enrolment, especially for older children. Other methods of identification presented provide supporting evidence for these conclusions.

NIDS Discussion Paper 2013/08

Title:  Unemployment and Household Formation

Author(s):  Amina Ebrahim, Ingrid Woolard and Murray Leibbrandt

Date:  2013

In comparison to other continents, Africa has received little scholarly attention with regard to household composition. Household composition is endogenous to a variety of welfare issues and little is understood about the determinants of this composition. Understanding the household composition and formation decision may improve our understanding of how the unemployed gain access to resources and how household composition could provide a safety net to the unemployed. However, increasingly, more work is surfacing around the topic in South Africa.

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