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Patterns of persistence: Intergenerational mobility and education in South Africa

Author

Listed:
  • Arden Finn

    (Southern Africa Labour and Development Research Unit, University of Cape Town.)

  • Murray Leibbrandt

    (Southern Africa Labour and Development Research Unit, University of Cape Town.)

  • Vimal Ranchhod

    (SALDRU, University of Cape Town)

Abstract

How should the correlation between the earnings of parents and children in South Africa be calculated in the presence of high unemployment, and what is the role of education in determining this relationship? We use the first four waves of the National Income Dynamics Study (NIDS) for 2008 to 2014/15, and the 1993 Project for Statistics on Living Standards and Development (PSLSD) to investigate the shape of the association between parental and child earnings across the earnings distribution, and find that the correlation is strongest at the ends of the distribution. We correct for possible biases that arise from co-resident parent-child pairs, and from selection into labour market participation in South Africa's high-unemployment society. We find that correcting for selection into employment increases the intergenerational elasticity of earnings by approximately 10 per cent. We unpack the role of education in determining the association of intergenerational earnings and find that the impact is strongest at the bottom of the earnings distribution, and that education accounts for approximately 40 percent of the total intergenerational earnings elasticity.

Suggested Citation

  • Arden Finn & Murray Leibbrandt & Vimal Ranchhod, 2016. "Patterns of persistence: Intergenerational mobility and education in South Africa," SALDRU Working Papers 175, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:175
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    References listed on IDEAS

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    Cited by:

    1. Amaral, Ernesto F. L. & Yen, Shih-Keng & Wang, Sharron Xuanren, 2019. "A meta-analysis of the association between income inequality and intergenerational mobility," OSF Preprints 8qmhw, Center for Open Science.
    2. Serena Merrino, 2020. "Measuring labour earnings inequality in post-apartheid South Africa," WIDER Working Paper Series wp-2020-32, World Institute for Development Economic Research (UNU-WIDER).
    3. Tiaan MEIRING & Catherine KANNEMEYER & Elnari POTGIETER, 2018. "The Gap Between Rich and Poor: South African Society’s Biggest Divide Depends on Where You Think You Fit In," Working Paper ffd19ae8-4b12-4b82-b218-8, Agence française de développement.
    4. Francesco Bloise & Paolo Brunori & Patrizio Piraino, 2020. "Estimating intergenerational income mobility on sub-optimal data: a machine learning approach," Working Papers 526, ECINEQ, Society for the Study of Economic Inequality.
    5. Patricia Funjika & Yoseph Getachew, 2019. "Colonial origin, ethnicity, and intergeneration mobility in Africa," WIDER Working Paper Series wp-2019-64, World Institute for Development Economic Research (UNU-WIDER).
    6. Simone Schotte, 2019. "Structural poverty dynamics in urban South Africa: A mixed-methods investigation," WIDER Working Paper Series wp-2019-100, World Institute for Development Economic Research (UNU-WIDER).

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