Integration into the South African core economy: household-level covariates

In this analysis of household survey data, households' main income sources are used as indicators of integration into the South African core economy. The allocation of main income sources is studied as the outcome of households' demographic composition, geographic location and earners' characteristics. The emerging picture of household income generation is one that disputes the common perception of African households as raising their incomes from a multitude of sources. The majority of surveyed households rely to a large extent on a single source of income and a single income earner. Separate multinomial logit models are estimated for urban and non-urban households where, in addition to the considerable association with non-urban residence, prominent earner covariates of low-integration income sources are female gender, old or young working age, and low levels of education. Both provincial location and within-provincial, subregional locations display strong impacts. The study also finds associations between main income sources and households' demographic compositions that are compatible with findings both in studies on private transfer behaviour and in the growing literature on endogenous household formation in South Africa.