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In-Work Poverty in South Africa: The Impact of Income Sharing in the Presence of High Unemployment

Author

Listed:
  • Kezia Lilenstein

    (DPRU, University of Cape Town)

  • Ingrid Woolard

    (SALDRU, University of Cape Town)

  • Murray Leibbrandt

    (SALDRU, University of Cape Town)

Abstract

South Africa is distinguished from other countries by its history of Apartheid, in which race-based policies resulted in vastly inferior education and labour market opportunities for African, Coloured and Asian/Indian individuals. This resulted in exceptionally high levels of poverty and inequality constructed along racial lines at the time of the transition to democracy in 1994, motivating the newly elected democratic government to make poverty alleviation a key focus of economic policy. The new political regime faced the major challenge of reforming government institutions which had historically been systematic in underproviding resources to the majority of the population. While the economic, political and social systems have undergone considerable change in the past two decades, the structural effects of colonialism and Apartheid are not easily undone. South Africa remains one of the most unequal societies in the world, resulting in persistently high levels of poverty in what is today an upper-middle income country. Using the lower bound cost of basic needs poverty line developed by Hoogeveen and Ozler (2006), the poverty headcount ratio was relatively unchanged between 1993 and 2010, falling from 56% to 54% over the period (Leibbrandt et al., 2010).

Suggested Citation

  • Kezia Lilenstein & Ingrid Woolard & Murray Leibbrandt, 2016. "In-Work Poverty in South Africa: The Impact of Income Sharing in the Presence of High Unemployment," SALDRU Working Papers 193, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:193
    as

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    File URL: http://opensaldru.uct.ac.za/bitstream/handle/11090/840/2016_182_Saldruwp.pdf?sequence=3
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    References listed on IDEAS

    as
    1. Lam, David & Ardington, Cally & Leibbrandt, Murray, 2011. "Schooling as a lottery: Racial differences in school advancement in urban South Africa," Journal of Development Economics, Elsevier, vol. 95(2), pages 121-136, July.
    2. Lance J. Lochner & Alexander Monge-Naranjo, 2011. "The Nature of Credit Constraints and Human Capital," American Economic Review, American Economic Association, vol. 101(6), pages 2487-2529, October.
    3. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    4. David Lam & Cally Ardington & Nicola Branson & Murray Leibbrandt, 2013. "Credit Constraints and the Racial Gap in Post-Secondary Education in South Africa," NBER Working Papers 19607, National Bureau of Economic Research, Inc.
    5. Michael F. Lovenheim, 2011. "The Effect of Liquid Housing Wealth on College Enrollment," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 741-771.
    6. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    7. Miquel Pellicer & Vimal Ranchhod, 2012. "Inequality Traps and Human Capital Accumulation in South Africa," SALDRU Working Papers 86, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Nicola Branson & Murray Leibbrandt, 2017. "Assessing the usability of the Western Cape Graduate Destination Survey for the analysis of labour market outcomes," SALDRU Working Papers 198, Southern Africa Labour and Development Research Unit, University of Cape Town.
    9. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
    10. Servaas van der Berg & Hendrik van Broekhuizen, 2012. "Graduate unemployment in South Africa: A much exaggerated problem," Working Papers 22/2012, Stellenbosch University, Department of Economics.
    11. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
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    Cited by:

    1. Haroon Bhorat & Kezia Lilenstein & Morné Oosthuizen & Amy Thornton, 2016. "Vulnerability In Employment: Evidence from South Africa," Working Papers 201604, University of Cape Town, Development Policy Research Unit.

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