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Poverty and Inequality in the First Decade of South Africa's Democracy: What can be Learnt from Panel Data from KwaZulu-Natal?

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  • Jorge Agüero
  • Michael R. Carter
  • Julian May

Abstract

Despite striking indicators depicting high per capita Gross Domestic Product together with poor social indicators, changes in the incidence and severity of money-metric poverty in South Africa since 1993 have been a source of debate. Household surveys suggest that poverty appears to have persisted during the 1990s, with perhaps some improvement since 2000. Inequality remains high, and is probably widening, but there has been delivery in terms of social services such as water and electricity. Panel data that track the circumstances of the same people contribute towards a deeper understanding of the complex story of poverty and inequality in South Africa. Data from the KwaZulu-Natal Income Dynamics Study (KIDS) collected between 1993 and 2004 show increasing poverty and inequality in the mid-1990s, with a partial reversal of some of these trends in the post-1998 period. The improved well-being of at least some next-generation households is a hopeful sign in these data. In addition, government transfers do seem to have contributed towards dampening the impact of market-generated inequality, reducing the spread of the expenditure distribution and lifting up the very lowest part of the distribution. In particular, the introduction of the Child Support Grant has dramatically increased the number of recipients of grants. This is reflected in the KIDS data, which show that the amount of transfers per-household has doubled. Copyright 2007 The author 2007. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Jorge Agüero & Michael R. Carter & Julian May, 2007. "Poverty and Inequality in the First Decade of South Africa's Democracy: What can be Learnt from Panel Data from KwaZulu-Natal?," Journal of African Economies, Centre for the Study of African Economies, vol. 16(5), pages 782-812, November.
    • Handle: RePEc:oup:jafrec:v:16:y:2007:i:5:p:782-812
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    Cited by:

    1. World Bank, 2020. "Ethiopia Poverty Assessment," World Bank Publications - Reports 33544, The World Bank Group.
    2. Margherita Scarlato & Giorgio D'Agostino, 2016. "Gender Disparities In The South African Labour Market: The Impact Of The Child Support Grant," Departmental Working Papers of Economics - University 'Roma Tre' 0210, Department of Economics - University Roma Tre.
    3. Marisa von Fintel & Asmus Zoch, 2015. "The dynamics of child poverty in South Africa between 2008 and 2012: An analysis using the National Income Dynamics Study," Working Papers 05/2015, Stellenbosch University, Department of Economics.
    4. Francesco Burchi & Margherita Scarlato & Giorgio d'Agostino, 2018. "Addressing Food Insecurity in Sub‐Saharan Africa: The Role of Cash Transfers," Poverty & Public Policy, John Wiley & Sons, vol. 10(4), pages 564-589, December.
    5. Amanda Lenhardt & Andrew Shepherd, 2013. "What has happened to the poorest 50%?," Global Development Institute Working Paper Series 18413, GDI, The University of Manchester.
    6. Christopher Hearle & Kanchana Ruwanpura, 2009. "Contentious Care: Foster Care Grants and the Caregiver-Orphan Relationship in KwaZulu-Natal Province, South Africa," Oxford Development Studies, Taylor & Francis Journals, vol. 37(4), pages 423-437.
    7. Marco d’Errico & Donato Romano & Rebecca Pietrelli, 2018. "Household resilience to food insecurity: evidence from Tanzania and Uganda," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(4), pages 1033-1054, August.
    8. Marisa Fintel & Asmus Zoch & Servaas Berg, 2017. "The Dynamics of Child Poverty in South Africa Between 2008 and 2012," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 10(4), pages 945-969, December.
    9. Margherita Scarlato & Giorgio d'Agostino, 2019. "Cash Transfers, Labor Supply, and Gender Inequality: Evidence from South Africa," Feminist Economics, Taylor & Francis Journals, vol. 25(4), pages 159-184, October.
    10. Jeremy R. Magruder, 2010. "Intergenerational Networks, Unemployment, and Persistent Inequality in South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 62-85, January.
    11. Florent Dubois & Christophe Muller, 2020. "The Contribution of Residential Segregation to Racial Income Gaps: Evidence from South Africa," AMSE Working Papers 2029, Aix-Marseille School of Economics, France.
    12. Paul Mosley, 2013. "Two Africas? Why Africa’s ‘Growth Miracle’ is barely reducing poverty," Global Development Institute Working Paper Series 19113, GDI, The University of Manchester.
    13. Giorgio d’Agostino & Margherita Scarlato & Silvia Napolitano, 2018. "Do Cash Transfers Promote Food Security? The Case of the South African Child Support Grant," Journal of African Economies, Centre for the Study of African Economies, vol. 27(4), pages 430-456.
    14. Finn, Arden & Leibbrandt, Murray, 2013. "The dynamics of poverty in the first three waves of NIDS," SALDRU Working Papers 119, Southern Africa Labour and Development Research Unit, University of Cape Town.
    15. Tobias Lechtenfeld & Asmus Zoch, 2014. "Income Convergence in South Africa: Fact or Measurement Error?," Working Papers 10/2014, Stellenbosch University, Department of Economics.
    16. Florent Dubois & Christophe Muller, 2022. "Residential segregation matters to racial income gaps: Evidence from South Africa," AMSE Working Papers 2205, Aix-Marseille School of Economics, France.
    17. Arden Finn & Murray Leibbrandt, 2016. "The dynamics of poverty in the first four waves of NIDS," SALDRU Working Papers 174, Southern Africa Labour and Development Research Unit, University of Cape Town.
    18. Peter Davis & Bob Baulch, 2010. "Casting the net wide and deep: lessons learned in a mixed-methods study of poverty dynamics in rural Bangladesh," Working Papers id:2674, eSocialSciences.
    19. d'Agostino, Giorgio & Scarlato, Margherita, 2016. "Gender Inequality in the South African Labour Market: the Impact of the Child Support Grant," MPRA Paper 72523, University Library of Munich, Germany.
    20. Simone Schotte, 2019. "Structural poverty dynamics in urban South Africa: A mixed-methods investigation," WIDER Working Paper Series wp-2019-100, World Institute for Development Economic Research (UNU-WIDER).
    21. Jennis J. BISER & Jeffrey A. EDWARDS, 2012. "Civil Liberties and Access to Water: Analysis of 193 Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(1).
    22. Potgieter, Petrus H., 2010. "Water and energy in South Africa – managing scarcity," MPRA Paper 23360, University Library of Munich, Germany.
    23. Giorgio d'Agostino & Francesco Giuli & Marco Lorusso & Margherita Scarlato, 2020. "Fiscal policy, labour market, and inequality: Diagnosing South Africa's anomalies in the shadow of racial discrimination," WIDER Working Paper Series wp-2020-122, World Institute for Development Economic Research (UNU-WIDER).

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