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NIDS Discussion Paper 2019/1
Title: Changes in the care burden over the transition to adulthood
Author(s): Debbie Budlender
This study uses two characteristics of NIDS that are not found in other national datasets in South Africa to explore the gendered changes in respect of care work that occur as older teenagers enter adulthood. These characteristics are, firstly, the inclusion of a question on the main caregiver for each child under 15 years of age and the longitudinal nature of the study which allows analysis to compare the situation of an individual at two different points in their life. The study explores changes in the care burden of young women and men who are aged between 15 and 19 (inclusive) in the 2008 NIDS survey and nine years older (24-28) in the 2017 NIDS survey between these two dates. It does so by constructing a care burden index for each of these years for all individuals with records for both dates. The paper first explores separately for each time period to what extent there are gender differences in the care burden as measured by the care index, using descriptive statistics. This is followed by regression analysis to determine which factors are associated with larger increases in the care burden at the endpoint.
NIDS Discussion Paper 2019/02
Title: Snakes and ladders and loaded dice: Poverty dynamics and inequality in South Africa between 2008-2017
Author(s): Rocco Zizzamia, Simone Schotte and Murray Leibbrandt
In developing country contexts, poverty analysis is most often undertaken using cross-sectional survey data. If this data is representative at a certain geographical level (local, regional or national), it can give an indication of the extent, depth, severity, and correlates of poverty in a place, at a single point in time. However, poverty is experienced not only at a point in time, but also over time. Poverty is not a static, timeless state – it is a dynamic and evolving phenomenon, with a past and a future (Calvo and Dercon, 2009). That is, households move into and out of poverty over time, remain trapped in poverty, or succeed in keeping their heads above water. In the world of risk and uncertainty in which poverty is lived (Dercon, 2006), poverty is experienced as a game of snakes and ladders. However, going beyond the element of chance, in this game factors that relate to the parental background or geographic location of the household, for example, have loaded the dice in favour of some individuals compared to others. In this sense, cross-sectional analyses remain blind to both the “snakes” that lead households or individuals to fall into poverty and the “ladders” which facilitate poverty escapes, as well as to the contextual factors that condition these transitions. Particularly with regard to the latter, it is important to note that the experience of poverty itself may affect not only the opportunities available to a household, but also its economic choices. By missing this dynamic element, a cross-sectional perspective is fundamentally limited in understanding the nature and determinants of poverty.
NIDS Discussion Paper 2019/03
Title: Recovery from stunting in early childhood and subsequent schooling outcomes: Evidence from NIDS Waves 1-5
Author(s): Daniela Casale
This paper explores the association between catch-up growth in early childhood and subsequent educational outcomes, using data from the first five waves of NIDS conducted between 2008 and 2017. While an extensive literature documents the negative effects of early stunting (a commonly-used marker of undernutrition) on children’s developmental potential, there is far less evidence on whether a recovery from stunting in early childhood - or ‘catch-up growth’ - helps to mitigate the negative effects of early growth retardation. This study shows that, on average, children who recovered from stunting between 2 and 4/5 years of age still go on to complete fewer years of schooling compared to their non-stunted counterparts. This seems to be driven in large part by a slower progression through the schooling system once enrolled. However, there also appear to be heterogeneous effects depending on the extent of recovery: The small proportion of children who recovered such that their height fell within the ‘normal’ range for their age at follow-up, exhibit similar educational outcomes to the non-stunted group. These results have important implications for the timing of nutritional investments in the early childhood period.
NIDS Discussion Paper 2019/04
Title: Building social cohesion in South Africa
Author(s): Lindokuhle Njozela and Justine Burns
This paper uses data collected across the five waves of the National Income Dynamics Study (NIDS), covering 2008-2017, to update a measure of social cohesion for South Africa. This updating exercise is important in validating the measure and establishing its credibility and potential use amongst policymakers. The index suggests that social cohesion has been improving over time in South Africa, albeit the gains have been small. These gains have been driven primarily by improvements in perceived trust, and more recently, as shown in the data for Wave 5, by reduced perceptions of inequality. Conversely, our results suggest that a sense of belonging has been eroded over time. Controlling for individual and time fixed effects, we examine the underlying individual and household characteristics that are correlated with these changes in dimensions of the social cohesion index. Our key results suggest that access to employment and earned income are positively associated with individual perceptions of trust, equality and a sense of belonging. Moreover, service delivery, particularly electrification, street lights, and refuse collection, has contributed positively towards building social cohesion. We also consider the use of national symbols and holidays to promote social cohesion. The results show that individuals interviewed soon after Freedom Day report significantly lower levels of trust but significantly higher levels of perceived equality than individuals interviewed later. Conversely, individuals interviewed soon after Heritage Day report significantly higher levels of trust than those interviewed later. Since public holidays are exogenously given, and interview date is, for the most part, also exogenous, these results certainly suggest that there may be short-term effects associated with the experience of a particular public holiday that undermine or promote social cohesion.
NIDS Discussion Paper 2019/05
Title: Factors influencing grant continuity and well-being outcomes for child grant beneficiaries
Author(s): Debbie Budlender
In 2017 the CSDA released a research report entitled “Family Contexts, the Child Support Grant, and Child Well-Being Outcomes” which included analysis of the NIDS 2008 data focusing on children under the age of 8 years old who received a CSG. This study builds on the earlier one. However, instead of the cross-sectional snapshot analysis, it investigates the situation for the same children nine years later, as reflected in the 2017 NIDS survey. In addition to the descriptive analysis of child recipients of the CSG provided in the earlier study, this new study explores the extent to which there are differences in outcomes between children who receive and do not receive the grant but are comparable in other respects. It also explores the extent to which the status of individual children changes between 2008 and 2017 in respect of receipt of the CSG i.e. to what extent children who were receiving the CSG in 2008 are no longer receiving it in 2017 and vice versa. This question is important as one would expect the impact to differ depending on the length of time over which the CSG was received.
NIDS Discussion Paper 2019/06
Title: An analysis of cheap cigarettes in South Africa
Author(s): Kirsten van der Zee, Sibahle Magadla, Corné van Walbeek
Using wave 5 of the National Income Dynamics Study, conducted in 2017, this paper investigates the market for very low-priced cigarettes, which probably are illicit. We find that approximately 30% of cigarettes consumed in South Africa are bought for R20 or less per 20-pack. Low-priced cigarettes are found across all nine provinces and these products are consumed in substantial quantities across all racial and socio-economic groups. At the margin, purchase of very cheap cigarettes in South Africa is associated with lower socio-economic factors, such as having lower levels of income and educational attainment. Cheap cigarettes are also strongly associated with specific packaging types, specifically 20-packs and cartons of 200. As illicit cigarettes undermine both the fiscal and health agendas of tobacco taxation policy, we strongly urge the relevant authorities to implement measures to curb the illicit trade.
NIDS Discussion Paper 2019/07
Title: Exploring psychological well-being and poverty dynamics in South-Africa: evidence from NIDS waves 1-5
Author(s): Nik Stoop, Murray Leibbrandt, Rocco Zizzamia
The mechanisms that perpetuate poverty are still not well understood. An emerging literature focuses on the psychology of poverty, investigating psychological and behavioral factors that may affect poverty entry and make it difficult to escape poverty. This paper explores the relationship between psychological well-being and poverty in South Africa. We rely on Waves 1-5 of the National Income Dynamics Study (NIDS), a nationally representative household panel survey that spans a decade. A descriptive analysis shows a strong negative correlation between psychological well-being and per capita household expenditure, with individuals in lower expenditure deciles displaying significantly higher risks of depression and lower levels of life satisfaction. To identify causal effects, we turn to an econometric framework that accounts for endogenous initial poverty conditions, unobserved heterogeneity and non-random panel attrition. Preliminary results suggest that the risk of poverty significantly increases as psychological well-being deteriorates, and the other way around. We discuss a range of avenues for follow-up research.
NIDS Discussion Paper 2019/08
Title: The complementarity between cash transfers and financial literacy for child growth
Author(s): Dieter von Fintel, Marisa von Fintel, and Thabani Buthelezi
A large body of international research focuses on the corrective influence that cash transfers can have on the health of chronically malnourished children. However, the evidence also points to the heterogeneity of the impact of these cash grants within the recipient population. Identifying pre-existing household conditions that are correlated with grant efficacy can have important policy consequences. In this paper, we examine one such a condition, namely the financial literacy of the caregiver of the child. We make use of the fourth and fifth waves of the South African National Income Dynamics Study (NIDS) data. We estimate the relationship between height and growth in a sample of children aged 0 to 7 years and the child support grant. We find that eligible children who have financially literate caregivers receiving the cash transfer on their behalf have higher growth trajectories over time, compared to children with financially illiterate caregivers. We however find no such effect for child height. Our results do not preclude a pure income effect for cash transfers: children who become CSG beneficiaries gain in height immediately, even without financially literate caregivers. Arguably, the combination of cash transfers and financial literacy have long-run benefits for children over and above an income effect. Although we are unable to identify the specific mechanisms through which financial literacy may impact child growth, we discuss some potential channels. The results have important policy implications regarding potential ways in which to improve the efficacy of the child support grant in South Africa.
NIDS Discussion Paper 2019/09
Title: Financial literacy in South Africa
Author(s): Lwanga Elizabeth Nanziri and Matthew Olckers
We analyse measures of financial literacy, included in the NIDS survey for the first time in Wave 5. South Africa follows patterns found in other countries. Less educated and low income respondents display low levels of financial literacy. Most countries have large gender gaps in financial literacy while the gender gap is absent in South Africa. Controlling for a number of socio-demographic variables, financial literacy is positively related to ownership of a pension and of mutual funds, stocks, or shares.
NIDS Discussion Paper 2019/10
Title: Unpacking grade repetition patterns in light of the progression policy in the Further Education and Training phase
Author(s): Jesal Kika and Janeli Kotze
Grade repetition is considered to be an important measure of education since it is both an outcome of a previous failure, and a predictor of subsequent failure (Anderson, Case, & Lam, 2001). Grade retention or the practice of requiring learners to repeat a grade, is used to afford underachieving learners with an opportunity to master the content of their current grade as well as acquire developmentally appropriate skills. It has, however, been a controversial issue in the sector, with some defending it as a beneficial remedial practice to improve academic performance, while others argue that it has detrimental effects (Peixoto, et al., 2016).
NIDS Discussion Paper 2019/11
Title: Exploring the transitions and well-being of young people who leave school before completing secondary education in South Africa
Author(s): Nicola Branson, Ariane De Lannoy and Amy Kahn
In South Africa, young people who have not completed their matric year, or the equivalent thereof, are more likely to struggle to find work, and remain unemployed for longer periods of time, or, if they do find work, are less likely to access stable, higher income jobs (Ingle and Mlatsheni, 2017; Mlatsheni and Ranchhod, 2017; Branson and Kahn, 2016; Salisbury, 2016; Van der Berg and Van Broekhuizen, 2012).
Internationally, a growing body of research indicates additional negative outcomes for youth who do not complete secondary education, ranging from higher levels of poverty, to ill health (including mental health), substance abuse, delinquency, incarceration, and prolonged dependence on social assistance (Bjerk, 2012; De Witte et al. 2013; Kimberly and Knight 2011; Lund, et al., 2018). These outcomes create an obvious concern for the loss of human potential for the individual. They also lead to questions about countries’ high rates of investment in educational systems and the effectiveness of those systems, and are at the basis of concerns about the larger societal and economic costs of incomplete education.
NIDS Discussion Paper 2019/12
Title: Realising a demographic dividend? A panel analysis to assess the outcomes of post-CSG beneficiaries
Author(s): Lauren Graham, Talita Greyling and Natalia Kopylova
As a young person approaches their 18th birthday they should be faced with the excitement of completing their schooling and making decisions about their future educational and career paths. However, for the majority of young people in South Africa, turning 18 also comes rather with the realisation that they face a precarious future, with little support to enable them to effectively transition to further education or work. While the state invests heavily in the lives of children, there is far less support for young people. This has implications for how effectively young people can transition to autonomous adulthood and South Africa’s ability to realise the demographic dividend that should come as a result of a large youth population that is healthy and well-educated (Lin, 2012; Oosthuizen, 2013; Ssewamala, 2015).
NIDS Discussion Paper 2019/13
Title: Measuring employment volatility in South Africa using NIDS: 2008 - 2017
Author(s): Rocco Zizzamia and Vimal Ranchhod
South Africa is a country with exceptionally high rates of unemployment, much of which is experienced as a chronic state. At the same time, a subset of the population repeatedly transitions into and out of work, thus experiencing unemployment more as a transient than as a chronic state. Of the available data sources at present in South Africa, only a few have the longitudinal structure required to investigate the rates at which people find and lose employment.
NIDS Discussion Paper 2019/14
Title: Does a motherhood penalty exist in the post-apartheid South African labour market?
Author(s): Sibahle Siphokazi Magadla, Murray Leibbrandt and Cecil Mlatsheni
Do working mothers earn less than non-mothers in the South African labour market? This study examines whether there exists a motherhood (or child) penalty for Black African female employees in post-apartheid South Africa using data from wave 5 of the National Income Dynamics Study (NIDS), from 2017. NIDS is the first nationally representative survey in South African to include comprehensive child birth history. Restricting analysis to women aged 20 to 49, the Mincerian regression model results from the analysis indicate that a motherhood penalty does exist, ceteris paribus. Moreover, the study uses unconditional quantile regressions (RIF-OLS) to examine the wage returns of mothers versus non-mothers along the wage distribution. The study finds that, when controlling for relevant observable characteristics, there exists a motherhood wage penalty at lower wage levels, but this effect wanes in prominence at higher wage quantiles. At higher wage levels, mothers earn higher hourly wages than their child-free counterparts, especially if they are married and work part-time. This result indicates the effect of a part-time hourly wage premium. The study then applies Oaxaca-Blinder type decompositions within the RIF framework to decompose changes in the motherhood wage gap along the distribution into explained and unexplained contributions related to a range of factors. The decomposition results indicate that only at the hourly wages of mothers minus wages of non-mothers are negative only at the 10th quantile, but positive everywhere else. Moreover, even though most of the wage differential between mothers and non-mothers is due to explained characteristics, at the lower levels unobservable traits have an impact on the wage gap. This implies that there are additional relevant factors such as societal norms, selection effects into employment and behavioural characteristics which should be considered when analysing women’s wage outcomes. Labour market policy needs to accommodate women with children, particularly if they are the main breadwinners at lower wage levels. Workplaces should consider embracing flexible work hours and provide the option for staff to work remotely.
NIDS Discussion Paper 2019/15
Title: Household Balance Sheets in South Africa
Author(s): Reza C. Daniels and Safia Khan
This paper evaluates the composition of household portfolios including assets, liabilities and net worth in the National Income Dynamics Study (NIDS) wave 5 (SALDRU, 2018). The inclusion of a top up sample of 1005 households made the sample more representative of the South African population – particularly the higher end of the wealth distribution, which was previously under-represented because of panel attrition between Waves 1-4. This resulted in an increase in the estimates of real total household assets and liabilities (after the removal of outliers), bringing the distribution closer to the macroeconomic household balance sheet estimates of assets and liabilities provided by the SA Reserve Bank (SARB), which implies that the top-up sample also improved the external validity of the wealth data. We find that household balance sheets are dominated by real estate and vehicular assets and debts, with notable exceptions in different covariate domains. In terms of inequality between waves 4 and 5 of NIDS, there has been a slight decrease in the Gini coefficient on net-worth despite the top-up sample, but an increase in the Gini coefficient on financial assets. The overall conclusion of the paper is that the NIDS Wave 5 wealth module is fit for purpose and researchers can conduct a wide range of analyses with the data, but researchers still need to conduct their own outlier detection checks before commencing analyses.