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Determinants of Income Mobility and Household Poverty Dynamics in South Africa

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Author Info
Woolard, Ingrid (Human Sciences Research Council and University of Port Elizabeth, South Africa)
Klasen, Stephan () (University of Göttingen and IZA Bonn)

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Abstract

In this paper we analyse household income mobility dynamics among Africans in South Africa’s most populous province, Kwazulu-Natal, between 1993 and 1998. Compared to industrialized and most developing countries, mobility has been quite high, as might have been expected after the transition in South Africa. This finding is robust when measurement error is controlled for. When disaggregating the sources of mobility, we find that demographic changes and employment changes account for a most of the mobility observed which is related to rapidly shifting household boundaries and a very volatile labour market in an environment of high unemployment. Using a multivariate analysis, we see that transitory incomes play a large role. We also find four types of poverty traps, associated with large initial household size, poor initial education, poor initial asset endowment and poor initial employment access that dominate the otherwise observed regression towards to the mean.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1030.

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Length: 39 pages
Date of creation: Feb 2004
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Handle: RePEc:iza:izadps:dp1030

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Related research
Keywords: mobility; poverty; South Africa; household structure;

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Klasen, Stephan & Woolard, Ingrid, 2000. "Surviving Unemployment without State Support: Unemployment and Household Formation in South Africa," IZA Discussion Papers 237, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier. [Downloadable!] (restricted)
  3. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February. [Downloadable!] (restricted)
  4. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January. [Downloadable!] (restricted)
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  5. Canto, Olga, 2000. "Income Mobility in Spain: How Much Is There?," Review of Income and Wealth, Blackwell Publishing, vol. 46(1), pages 85-102, March.
    Other versions:
  6. Gottschald, Peter T, 1982. "Earnings Mobility: Permanent Change or Transitory Fluctuations," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 450-56, August. [Downloadable!] (restricted)
  7. Bound, John, et al, 1994. "Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 345-68, July. [Downloadable!] (restricted)
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  9. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September. [Downloadable!] (restricted)
  10. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
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    Other versions:
  12. Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476 Elsevier. [Downloadable!] (restricted)
  13. Glewwe, Paul & Gragnolati, Michele & Zaman, Hassan, 2002. "Who Gained from Vietnam's Boom in the 1990s?," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 773-92, July.
  14. Fields, Gary S. & Ok, Efe A., 1996. "The Measurement of Income Mobility: An Introduction to the Literature," Working Papers 96-05, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  15. Patricia Justino & Julie Litchfield, 2003. "Poverty Dynamics in Rural Vietnam: Winners and Losers During Reform," PRUS Working Papers 10, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  16. Aaberge, Rolf & Björklund, Anders & Jäntti, Markus & Palme, Mårten & Pedersen, Peder & Smith, Nina & Wennemo, Tom, 1996. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Working Paper Series in Economics and Finance 98, Stockholm School of Economics, revised Aug 2002. [Downloadable!]
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  17. Gary Fields & Paul Cichello & Samuel Freije & Marta Menéndez & David Newhouse, 2003. "Household income dynamics: a four-country story," The Journal of Development Studies, Taylor and Francis Journals, vol. 40(2), pages 30-54, January. [Downloadable!] (restricted)
  18. McCulloch, Neil & Calandrino, Michele, 2003. "Vulnerability and Chronic Poverty in Rural Sichuan," World Development, Elsevier, vol. 31(3), pages 611-628, March. [Downloadable!] (restricted)
  19. Klasen, Stephan, 2000. "Measuring Poverty and Deprivation in South Africa," Review of Income and Wealth, Blackwell Publishing, vol. 46(1), pages 33-58, March.
  20. Jarvis, Sarah & Jenkins, Stephen P, 1998. "How Much Income Mobility Is There in Britain?," Economic Journal, Royal Economic Society, vol. 108(447), pages 428-43, March. [Downloadable!] (restricted)
  21. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287. [Downloadable!] (restricted)
  22. Gary Fields & Paul Cichello & Samuel Freije & Marta Menéndez & David Newhouse, 2003. "For Richer or for Poorer? Evidence from Indonesia, South Africa, Spain, and Venezuela," Journal of Economic Inequality, Springer, vol. 1(1), pages 67-99, April. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Michael Grimm, 2006. "Mortality and Survivors' Consumption," Discussion Papers of DIW Berlin 611, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  2. Alex Sienaert, 2007. "Migration, Remittances and Public Transfers: Evidence from South Africa," Economics Series Working Papers 351, University of Oxford, Department of Economics. [Downloadable!]
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