Inequality in South Africa: The distribution of income,expenditure and earnings

This article empirically analyses the state of inequality in South Africa. International comparisons show South Africa to be among the most unequal countries in the world. The levels of income inequality and earnings inequality are analysed with a range of measures and methods. The results quantify the extremely high level of inequality in South Africa. Earnings inequality appears to be falling in recent years, with relative losses in the upper-middle parts of the earnings distribution. Decomposing income inequality by factor source reveals the importance of earnings in accounting for overall income inequality. The article concludes by observing that, internationally, significant sustained decreases in inequality rarely come about without policies aimed at achieving that, and suggests that strong policy interventions would be needed to reduce inequality in South Africa to levels that are in the range typically found internationally.     

The growth,poverty and inequality nexus in South Africa: Cointegration and causality analysis

This study empirically established the long-run relationship and causality effects that exist between growth, poverty and inequality. The analysis was carried out on a panel of nine South African provinces from 1995 to 2012. To capture poverty and inequality in a broader context, two measures of poverty (income and non-income) and three measures of inequality (income, education and land) were adopted for the study. The results confirm that there is a long-run relationship between growth, poverty and inequality. Notable results from the causality tests suggest that growth does not promote equal distribution of income in society but as income distribution begins to equalise, economic growth rises. This is regarded as growth–inequality disconnect. The unidirectional causality, which runs from income poverty to income inequality, suggests that a rising level of income poverty will lead to falling income inequality in the society; likewise, income inequality increases as non-income poverty declines.     

Social protection,redistribution and economic growth

Social protection has conventionally been associated with redistribution and equity. This paper examines the effects of different types of social protection on economic growth. It looks at the possible effects on human capital formation, on physical investment and innovation, on the local economy and on the macroeconomy, discusses these effects in theory and reviews empirical evidence of such effects. It considers the widely varying impacts that different types of social protection can have on the distribution of incomes and on economic growth. The paper concludes that, in analysing, assessing and planning social protection, it is crucially important to consider the potential drawbacks – and the benefits.     

Multidimensional poverty in South Africa in 2001–16

This study uses the Census 2001 and 2011 as well as Community Survey 2007 and 2016 data to derive a multidimensional poverty index in South Africa for each year, before assessing the changes in non-money-metric, multidimensional poverty over time. Both the incidence and intensity of multidimensional poverty decreased continuously, and these declines were more rapid than that of money-metric poverty. The decrease in multidimensional poverty between 2001 and 2016 was most rapid for female Africans residing in rural areas in Eastern Cape and KwaZulu–Natal provinces. Multidimensional poverty was most serious in numerous district councils in these two provinces, despite the fact that poverty decline was also most rapid in these district councils. The results of the multidimensional poverty index decomposition indicated that Africans contributed more than 95% to multidimensional poverty, while unemployment, years of schooling and disability were the three indicators contributing most to poverty.     

Globalisation,poverty and corruption: Retarding progress in South Africa

ABSTRACT

Poverty and corruption can both immiserate a nation. Globalisation through open trade can potentially increase economic growth, providing employment and increased incomes to the poor. Corruption can dampen or even reduce these positive developments. Although globalisation is considered instrumental in development strategies, theoretically, the impact of globalisation on poverty reduction is ambiguous, an ambiguity that is also reflected in the empirical literature. The corruption-poverty literature clearly reveals that empirical findings on such association are at best heterogeneous. This article examines the effects of globalisation and corruption on poverty using time series data for South Africa for the period 1991–2016. Three indicators of poverty and recently developed measures of globalisation and corruption were employed in the logistic regression model used for estimation. The results confirm that globalisation reduces poverty while corruption intensifies it. The globalisation findings are robust across the different measures of poverty while unidirectional results show corruption increases poverty.     

Labour unions and wage inequality among African men in South Africa

One Achilles' heel of post-Apartheid South Africa is the growing intra-racial income inequality, particularly among Africans. This paper examines the role of labour unions in explaining this phenomenon among African men given that labour markets are at the core of income inequality in South Africa. Using cross-sectional data drawn from Labour Force Surveys for 2001–10, we find a monotonically declining union wage premium. Further, our results indicate that unions have both compressionary and disequalising effects on wages. The disequalising effect dominates the compressionary effect, suggesting that unions have a net effect of increasing wage inequality among African men in South Africa. This finding implies that there is scope for unions to reduce inequality through initiatives that promote wage compression.     

One Kind of Freedom: Poverty Dynamics in Post-apartheid South Africa

A 1993 South African living standards survey documented the legacy of apartheid in the form high levels of inequality and human insecurity. Drawing on a 1998 re-survey of households in the 1993 study, this paper explores whether this legacy has been superseded, or whether apartheid's end has been only one kind of freedom that has left households in a poverty trap from which they cannot escape. After proposing a theoretically grounded dynamic poverty typology that distinguishes stochastic from structural poverty transitions, the paper goes on to estimate that significant numbers of the South African poor are potentially trapped in a structural poverty trap and lack the means to escape poverty over time.     

Measurements and determinants of multifaceted poverty in South Africa

Poverty, despite being a multifaceted concept, is commonly measured in either absolute or relative monetary terms. However, it can also be measured subjectively, as people form perceptions on their relative income, welfare and life satisfaction. This is the first study that uses the National Income Dynamics Study data to analyse poverty across various objective and subjective methods. The paper finds that while respondents' poverty status varies across methods, blacks remain the racial group most likely to be defined as poor by at least one method. The multivariate analysis reveals that the impact of some explanatory variables, such as experience of negative events, frequency of crime victimisation, health status and importance of religious activities, is mixed across methods.     

Growth,Poverty, and Inequality under Jokowi

SUMMARY

The political authority of President Joko Widodo (Jokowi) was bolstered in the third quarter of 2015 by a cabinet reshuffle, his coalition's gaining a parliamentary majority, and several foreign-policy developments. Indonesia's request to rejoin OPEC, for example, after having left in 2008, seemed more about international relations than oil prices, while official visits to the Middle East and the United States allowed Jokowi to project his presidency on the international stage. He still faces resistance from within his own party, however.

Jokowi's politically bold reshuffle of economic ministers in August soon yielded a range of policy announcements. In September and October, his government introduced its first substantial set of reforms—a number of economic policy packages intended, among other things, to attract investment and stimulate domestic demand. If even half of these policies are put in place, the impact on Indonesia's economy should be tangible.

Few countries have escaped the effects of falling global commodity prices and China's growth slowdown. At 4.7%, year on year, in the third quarter Indonesia's rate of economic growth again fell short of the government's target. Slowing growth and a negative outlook have lowered market expectations and weakened the rupiah, which is also burdened by the large outstanding external debt held by corporate borrowers. Indonesia's real effective exchange rate has recently begun to depreciate, however, which may stimulate exports. Growth prospects will also improve if the substantial increase in capital and infrastructure spending allocated in the state budget is realised.

Against this backdrop, we focus on what has happened to poverty and inequality in Indonesia since Jokowi took office. The distributional impacts of the current macroeconomic climate are likely to be hardest felt by the poor. Indonesia is well known for its record on poverty reduction, but between September 2014 and March 2015 the share of the population in poverty increased, even though economic growth was close to 5.0%. Slowing growth, rising food prices, the falling real wages of farmers, and the delayed disbursement of fuel-price compensation all had an effect. Such impacts may be mitigated in the medium term by Jokowi's budget reallocations to infrastructure, if realised, and his expansion of social spending.     

Potential Impact of Climate Change and Armed Conflict on Inequality in Sub-Saharan Africa

This study investigates the potential impact of climate change and armed conflict on inequality in Sub-Saharan Africa (SSA). The system-GMM for a panel of 35 SSA countries is employed using annual data from 1997 to 2018. The empirical results indicate that armed conflict and climate are major drivers of inequality in SSA. The direct impact of the two determinants is more than the indirect impact. Also, the impact of armed conflict is more than the climate change. The coefficients of population growth, output growth, unemployment, natural rent, exchange rate and inflation rate are significant positive predictors of inequality in the SSA. The study advocates for a multidisciplinary inclusive growth strategy that prioritises the climate change reversal, de-escalation of armed conflict, population control, reduction of the unemployment rate and increasing informal sector productivity, to promote inclusive growth and reduce inequality. However, sequencing the policy targets relative to the magnitude of their impact on inequality is extremely crucial.     

Smoke and mirrors? The science of poverty measurement and its application

Measures of poverty are much used, but also much criticised as having limited value in debates on public resource allocation. Some argue that the measures are too conservative and do little more than complicate important issues of inequality and injustice. However, poverty measurement can be sensitive to these concerns if grounded in the field's well-developed theoretical foundation. In South Africa, poverty measures over more than 50 years have consistently taken into account distributional issues and the causes and implications of deprivation, and most South African analyses of poverty have recognised and incorporated the multi-dimensional nature of poverty. Recognising different perceptions of aggregation, time horizon and the role of states and markets is perhaps more important than methodology when assessing what poverty measures can contribute. With proper theorisation, and attention paid to the purpose of poverty diagnostics, measurement is more than sleight-of-hand and can provide both a tool for advocacy and a means to implement policies that promote greater social justice.     

Few Opportunities, Much Desperation: The Dichotomy of Non-Agricultural Activities and Inequality in Western Kenya

Using data from Western Kenya, we confirm the existence of a dichotomous non-agricultural sector. The poverty and inequality implications of the differently motivated diversification strategies only partly correspond to expected patterns. While high-return activities are indeed confined to richer households, low-return activities constitute an important income source for households across the entire income distribution. Finally, we examine the wider implications of our findings for rural livelihoods. We find that only engagement in high-return non-agricultural activities is significantly associated with increased agricultural productivity. It seems that such high-return activities play a key role in triggering cumulative effects of relative livelihood success.     

海外学者关于中国收入和财富分配不平等问题的研究综述

文章首先分析了海外学者关于中国收入和财富分配不平等问题研究的观点;其次,分析了海外学者对改革与分配相关问题研究的方法与特点;最后在研究的基础上结合我国实际并提出相关的建议。     

Estimating a poverty line: An application to free basic municipal services in South Africa

One of the key interventions aimed at improving the welfare of South African households has been local government's provision of a package of free basic municipal services to poor households. It is, however, not completely clear how different municipalities identify households that are eligible for these services. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 a month. This ‘free basic services poverty line’ is, however, low in comparison with a number of unofficial poverty lines used by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the free basic services line, in terms of the additional share and number of households eligible for support and the additional financial cost. We find that urban municipalities would face the steepest increases in their free basic services budgets with any potential increase in the free basic services poverty line.     

Poverty, Inequality and Growth in Selected Middle East and North Africa Countries, 1980–2000

This paper uses crosscountry data and country-case studies to analyze trends in poverty, inequality and economic growth in the Middle East and North Africa (MENA) region. Compared to other regions, the MENA region has a low incidence of poverty and income inequality. Two factors account for this situation: international migration/remittances and public sector (government) employment. Since the early 1980s international migration to the Persian Gulf and Europe has helped boost the incomes of the poor in the Middle East. At the same time, many MENA countries have used government employment as a means of keeping people employed and out of poverty. Regression analysis of crosscountry data shows that both of these factors have a statistically significant impact on reducing the level and depth of poverty in the MENA region.