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Determinants of Income Mobility and Household Poverty Dynamics in South Africa

  • Woolard, Ingrid


    (University of Cape Town)

  • Klasen, Stephan


    (University of Göttingen)

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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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
Date of revision:
Publication status: published in: Journal of Development Studies, 2005, 41 (5), 865-897
Handle: RePEc:iza:izadps:dp1030
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  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).
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  7. 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.
  8. John Bound & Alan B. Krueger, 1989. "The Extent of Measurement Error In Longitudinal Earnings Data: Do Two Wrongs Make A Right?," NBER Working Papers 2885, National Bureau of Economic Research, Inc.
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  11. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
  12. Klasen, Stephan, 2000. "Measuring Poverty and Deprivation in South Africa," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 33-58, March.
  13. Canto, Olga, 2000. "Income Mobility in Spain: How Much Is There?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 85-102, March.
  14. McCulloch, Neil & Calandrino, Michele, 2003. "Vulnerability and Chronic Poverty in Rural Sichuan," World Development, Elsevier, vol. 31(3), pages 611-628, March.
  15. 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.
  16. 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.
  17. 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.
  18. 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.
  19. Jyotsna Jalan & Martin Ravallion, 2000. "Is transient poverty different? Evidence for rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 82-99.
  20. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
  21. 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.
  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.
  23. 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.
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