The dynamics of poverty in the first four waves of NIDS

We analyse the determinants of South Africans moving into and out of poverty over the first four waves of the National Income Dynamics Study (NIDS) for the years 2008 to 2014/2015. We focus on the balanced panel of NIDS respondents and find that a relatively high poverty exit rate was accompanied by a substantial proportion of the population being trapped in severe poverty. The roles of demographic versus income changes over time reveal that changing household composition is the largest trigger of poverty entry and exit, and that increasing income from government grants is the main trigger precipitating poverty exit for about one quarter of our sample. Regression analysis shows that access to the labour market within the household is the single most important determinant of poverty entry and exit after race. We calculate multidimensional poverty rates and find that although MPI poverty is far lower than money-metric poverty, being chronically MPI poor over the four waves is closely matched by being chronically income poor.