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Incomes in South Africa since the fall of Apartheid

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Author Info
Murray Leibbrandt (University of Cape Town)
James Levinsohn (University of Michigan, National Bureau of Economic Research)
Justin McCrary (University of Michigan)

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Abstract

This paper examines changes in individual real incomes in South Africa between 1995 and 2000. We document substantial declines—on the order of 40%—in real incomes for both men and women. The brunt of the income decline appears to have been shouldered by the young and the non-White. We argue that changes in respondent attributes are insufficient to explain this decline. For most groups, a (conservative) correction for selection into income recipiency explains some, but not all, of the income decline. For other groups, selection is a potential explanation for the income decline. Perhaps the most persuasive explanation of the evidence is substantial economic restructuring of the South African economy in which wages are not bid up to keep pace with price changes due to a differentially slack labor market.

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Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 536.

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Length: 63 pages
Date of creation: 2005
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Handle: RePEc:mie:wpaper:536

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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. Deaton, A. & Paxson, C., 1997. "Economies of Scale, Household Size, and the Demand for Food," Papers 178, Princeton, Woodrow Wilson School - Development Studies.
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  2. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists," NBER Working Papers 11627, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, 05. [Downloadable!] (restricted)
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  4. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09. [Downloadable!] (restricted)
  5. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-61, September. [Downloadable!] (restricted)
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  6. Thomas Lemieux, 2002. "Decomposing changes in wage distributions: a unified approach," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 646-688, November. [Downloadable!] (restricted)
  7. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
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  1. Gordon H. Hanson, 2005. "Globalization, Labor Income, and Poverty in Mexico," NBER Working Papers 11027, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Dani Rodrik, 2006. "Understanding South Africa's Economic Puzzles," Working Papers id:641, esocialsciences.com. [Downloadable!]
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  3. Kalie Pauw & Liberty Mncube, 2007. "The Impact of Growth and Redistribution on Poverty and Inequality in South Africa," Working Papers 96102, University of Cape Town, Development Policy Research Unit. [Downloadable!]
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  4. Kristjan-Olari Leping & Ott Toomet, 2007. "Ethnic Wage Gap And Political Break-Ups: Estonia During Political And Economic Transition," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 53, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  5. Van der Berg, Servaas & Louw, Megan & Burger, Ronelle, 2007. "Post-Apartheid South Africa: Poverty and Distribution Trends in an Era of Globalization," MPRA Paper 9065, University Library of Munich, Germany. [Downloadable!]
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  6. Miracle Ntuli, 2007. "Determinants of South African Women’s Labour Force Participation, 1995-2004," IZA Discussion Papers 3119, Institute for the Study of Labor (IZA). [Downloadable!]
  7. James Levinsohn, 2007. "Globalization and the Returns to Speaking English in South Africa," NBER Chapters, in: Globalization and Poverty, pages 629-646 National Bureau of Economic Research, Inc. [Downloadable!]
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  8. Rodrick, Dani, 2006. "Understanding South Africa's Economic Puzzles," Working Paper Series rwp06-039, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  9. Servaas van der Berg & Megan Louw & Derek Yu, 2007. "Post-transition poverty trends based on an alternative data source," Working Papers 08/2007, Stellenbosch University, Department of Economics. [Downloadable!]
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  10. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," NBER Working Papers 11628, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Haroon Bhorat & Carlene van der Westhuizen & Pranushka Naidoo, 2006. "Shifts in Non-Income Welfare in South Africa: 1993-2004," Working Papers 9616, University of Cape Town, Development Policy Research Unit. [Downloadable!]
  12. Gordon H. Hanson, 2005. "Emigration, Labor Supply, and Earnings in Mexico," NBER Working Papers 11412, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Haroon Bhorat & Ravi Kanbur, 2005. "Poverty and Well-being in Post-Apartheid South Africa: An Overview of Data, Outcomes and Policy," Working Papers 9620, University of Cape Town, Development Policy Research Unit. [Downloadable!]
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