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Household Inequality And The Labor Market In South Africa

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  • M Leibbrandt
  • H Bhorat
  • I Woolard

Abstract

There has been very little detailed exploration of the relationship between wage income and household inequality in South Africa despite the relevance of this issue for many contemporary growth and development policy debates. This article is directed at such an analysis. It uses a decomposition of household income inequality by income components to highlight the dominance of wage income in driving overall income inequality. This is followed by a detailed discussion of the distribution of the unemployed across different wage-earning household categories. Many of the unemployed are seen to depend on wage earners within their households, but a significant percentage of the unemployed, especially in rural areas, have no direct link to labor market earners. In such cases, the creation of employment is essential. The conclusion explores policy implications by linking our empirical findings to South African debates over the quality versus the quantity of employment. Copyright 2001 Western Economic Association International.

Suggested Citation

  • M Leibbrandt & H Bhorat & I Woolard, 2001. "Household Inequality And The Labor Market In South Africa," Contemporary Economic Policy, Western Economic Association International, vol. 19(1), pages 73-86, January.
  • Handle: RePEc:bla:coecpo:v:19:y:2001:i:1:p:73-86
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    References listed on IDEAS

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    1. T. Paul Schultz & Germano Mwabu, 1998. "Labor Unions and the Distribution of Wages and Employment in South Africa," ILR Review, Cornell University, ILR School, vol. 51(4), pages 680-703, July.
    2. Anthony F. Shorrocks, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 311-326.
    3. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
    4. repec:fth:prinin:333 is not listed on IDEAS
    5. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-740, September.
    6. Robert I. Lerman & Shlomo Yitzhaki, 1994. "Effect of Marginal Changes in Income Sources On U.S. Income Inequality," Public Finance Review, , vol. 22(4), pages 403-417, October.
    7. David Card & Alan B. Krueger, 1994. "A Living Wage? The Effects of the Minimum Wage on the Distribution of Wages, the Distribution of Family Earnings, and Poverty," Working Papers 712, Princeton University, Department of Economics, Industrial Relations Section..
    8. repec:oup:jafrec:v:9:y:2000:i:1:p:79-99. is not listed on IDEAS
    9. David Card & Alan Krueger, 1994. "A Living Wage? The Effects of the Minimum Wage on the Distribution of Wages, the Distribution of Family Earnings, and Poverty," Working Papers 712, Princeton University, Department of Economics, Industrial Relations Section..
    10. Kaplinsky, Raphael, 1995. "Capital Intensity in South African Manufacturing and Unemployment, 1972-1990," World Development, Elsevier, vol. 23(2), pages 179-192, February.
    11. M Leibbrandt & C Woolard & I Woolard, 2000. "The contribution of income components to income inequality in the rural former homelands of South Africa: a decomposable Gini analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 9(1), pages 79-99.
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    Citations

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    Cited by:

    1. Finn, Arden & Leibbrandt, Murray, 2013. "Mobility and Inequality in the First Three Waves of NIDS," SALDRU Working Papers 120, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Daniela Casale & Colette Muller & Dorrit Posel, 2004. "'Two Million Net New Jobs': A Reconsideration Of The Rise In Employment In South Africa, 1995-2003," South African Journal of Economics, Economic Society of South Africa, vol. 72(5), pages 978-1002, December.
    3. Pauw, Kalie, 2005. "Quantifying the Economic Divide in South African Agriculture: An Income-Side Analysis," Working Paper Series 15630, PROVIDE Project.
    4. Martin Wittenberg, 2017. "Economics and Transformation: Measurements, Models, Maths and Myths," SALDRU Working Papers 211, Southern Africa Labour and Development Research Unit, University of Cape Town.
    5. Daniela Casale & Colette Muller & Dorrit Posel, 2005. "‘Two Million Net New Jobs’: A Reconsideration of the Rise in Employment in South Africa, 1995-2003," Working Papers 05097, University of Cape Town, Development Policy Research Unit.
    6. Johannes Fedderke, 2012. "The Cost of Rigidity: The Case of the South African Labor Market," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(4), pages 809-842, December.
    7. Frederick C.v.N. Fourie, 2011. "The South African unemployment debate: three worlds, three discourses?," SALDRU Working Papers 63, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Paul Cichello & Gary Fields & Murray Leibbrandt, 2003. "Earnings and Employment Dynamics for Africans in Post-apartheid South Africa: A Panel Study of KwaZulu-Natal," Working Papers 03077, University of Cape Town, Development Policy Research Unit.

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