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Not Separate, Not Equal: Poverty and Inequality in Post-apartheid South Africa

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  • Berk Özler

Abstract

I examine the changes in poverty and inequality in South Africa during the first 5 years following the end of the apartheid era. First, I construct new, comparable consumption aggregates for 1995 and 2000. Second, using the “cost-of basic-needs” approach, I derive lower-bound (R322, in South African rands) and upper-bound (R593) poverty lines (per capita per month in 2000 prices, adjusted for provincial cost of living differences) for South Africa. I find that real per capita household expenditures declined at the bottom end of the expenditure distribution during this period of low gross domestic product growth. The squared poverty gap significantly increased for most of qthe relevant range of poverty lines, while the headcount index remained unchanged. Inequality among the African population increased significantly. Even among subgroups of the population that experienced healthy consumption growth, such as coloureds or the Western Cape Province, the rate of poverty reduction was low because the distributional shifts were not pro-poor. I conclude that South Africa needs to grow in a way that also improves the distribution of incomes if it is to make significant progress against poverty in the short to medium run.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 55 (2007)
Issue (Month): ()
Pages: 487-529

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Handle: RePEc:ucp:ecdecc:v:55:y:2007:p:487-529

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  1. Angus Deaton & Alessandro Tarozzi, 2000. "Prices and poverty in India," Working Papers 213, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  2. Fields, Gary S. & Cichello, Paul & Freije, Samuel & Menéndez, Marta & Newhouse, David, 2003. "For Richer or for Poorer ? Evidence from Indonesia, South Africa, Spain, and Venezuela," Economics Papers from University Paris Dauphine 123456789/1560, Paris Dauphine University.
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  4. Anne Case & Angus Deaton, 1999. "School Inputs And Educational Outcomes In South Africa," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 1047-1084, August.
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  7. Datt, Gaurav & Jolliffe, Dean, 2005. "Poverty in Egypt: Modeling and Policy Simulations," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 327-46, January.
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  14. Mwabu, Germano & Schultz, T Paul, 1996. "Education Returns across Quantiles of the Wage Function: Alternative Explanations for Returns to Education by Race in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 335-39, May.
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  18. Stephan Klasen & Ingrid Woolard, 2001. "Surviving Unemployment without State Support: Unemployment and Household Formation in South Africa," CESifo Working Paper Series 533, CESifo Group Munich.
  19. repec:fth:oxesaf:99-12 is not listed on IDEAS
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Cited by:
  1. Wolfhard Kaus, 2010. "Conspicuous Consumption and Race: Evidence from South Africa," Papers on Economics and Evolution 2010-03, Max Planck Institute of Economics, Evolutionary Economics Group.
  2. Murray Leibbrandt & James Levinsohn, 2014. "Fifteen Years On: Household Incomes in South Africa," NBER Chapters, in: African Successes: Government and Institutions National Bureau of Economic Research, Inc.
  3. Tregenna, F., 2009. "The Relationship Between Unemployment and Earnings Inequality in South Africa," Cambridge Working Papers in Economics 0907, Faculty of Economics, University of Cambridge.
  4. repec:ldr:wpaper:92 is not listed on IDEAS
  5. Thurlow, James, 2006. "Has trade liberalization in South Africa affected men and women differently?:," DSGD discussion papers 36, International Food Policy Research Institute (IFPRI).
  6. Nicola Branson, 2009. "Re-weighting the OHS and LFS National household Survey Data to create a consistent series over time: A Cross Entropy Estimation Approach," SALDRU Working Papers 38, Southern Africa Labour and Development Research Unit, University of Cape Town.
  7. Bourguignon, Francois & Levin, Victoria & Rosenblatt, David, 2006. "Global redistribution of income," Policy Research Working Paper Series 3961, The World Bank.

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