2008 Commissioners Indaba 19 – 21 st November 2008 Sun City, North West Province Pro-Poor Economic Growth and the Labour Market in South Africa: Exploring.

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Presentation transcript:

2008 Commissioners Indaba 19 – 21 st November 2008 Sun City, North West Province Pro-Poor Economic Growth and the Labour Market in South Africa: Exploring the Interactions Haroon Bhorat

Introduction Release of New Data, Enables a 10-year Overview 2008 COMMISSIONERS INDABA November 2008 Sun City Consistent Positive Economic Growth post-1994 BUT what has the Impact been on Poverty & Inequality Evidence from 1995 – 2000: No Major Shifts in Poverty Levels, but Increase in Inequality

2008 COMMISSIONERS INDABA November 2008 Sun City CategoryHeadcount RatePoverty Gap Ratio Year R322 a month poverty line African63.04%56.34%31.86%24.44% Coloured39.00%34.19%14.66%12.98% Asian4.71%8.43%1.03%2.17% White0.53%0.38%0.22%0.11% Total52.54%47.99%26.04%20.61% R174 a month poverty line African38.18%27.15%14.71%8.55% Coloured14.62%12.30%4.09%3.88% Asian0.82%1.60%0.14%1.07% White0.23%0.01%0.09%0.00% Total30.92%22.68%11.77%7.15% Poverty shifts by race

2008 COMMISSIONERS INDABA November 2008 Sun City Share in population & poverty Population Share R322 Poverty Line R174 Poverty Line Population Share R322 Poverty Line R174 Poverty Line Race African77.28%92.74%95.45%79.40%93.22%95.05% Coloured9.31%6.92%4.40%8.79%6.26%4.77% Asian2.61%0.23%0.07%2.48%0.44%0.18% White10.79%0.11%0.08%9.23%0.07%0.00%

2008 COMMISSIONERS INDABA November 2008 Sun City Poverty shifts by gender of household head CategoryHeadcount RatePoverty Gap Ratio Year R322 a month poverty line Male45.83%38.34%22.22%16.02% Female65.65%60.57%33.52%26.59% Total52.54%47.99%26.04%20.61% R174 a month poverty line Male26.12%17.10%9.79%5.38% Female40.31%29.93%15.63%9.46% Total30.92%22.68%11.77%7.15%

2008 COMMISSIONERS INDABA November 2008 Sun City Poverty shifts without poverty lines: Cumulative distribution functions (cdf) South africa

2008 COMMISSIONERS INDABA November 2008 Sun City Cumulative distribution functions (cdf) Gender of hh head

2008 COMMISSIONERS INDABA November 2008 Sun City Shifts in inequality: gini coefficients Category African Coloured Asian White Total

2008 COMMISSIONERS INDABA November 2008 Sun City Lorenz curves for Africans and Whites

2008 COMMISSIONERS INDABA November 2008 Sun City Inequality within and between groups (using the theil index) By Race Within-group component (53.15%)(50.35%) Between-group component (46.85%)(49.65%) Total Inequality (Theil-T) (100%)

2008 COMMISSIONERS INDABA November 2008 Sun City Growth incidence curve for South Africa:

2008 COMMISSIONERS INDABA November 2008 Sun City Per capita grant income as share of Total wage and grant income 1999 and 2005

2008 COMMISSIONERS INDABA November 2008 Sun City Access rates of state transfers in South Africa,

2008 COMMISSIONERS INDABA November 2008 Sun City Elasticities of poverty measures for South africa Poverty Growth Elasticity Measure: Poverty Inequality Elasticity: Marginal Proportional Rate of Substitution (MPRS):  % change in poverty due to 1 % growth in pc expenditure  distribution neutral  % change in poverty due to 1 % increase in the Gini  increase in mean expenditure required to mitigate against increasing inequality (1% increase in Gini

2008 COMMISSIONERS INDABA November 2008 Sun City Elasticities of poverty measures For South Africa CategoryR322 Poverty LineR174 Poverty Line Year P1-Mean Expenditure Elasticity P1-Gini Elasticity MPRS: P

2008 COMMISSIONERS INDABA November 2008 Sun City Datt-Ravallion Decompositions: Category Growth Component Redistribution Component Total Change in Poverty Poverty Line R322 per month Total African Coloured Asian White Poverty Line R174 per month Total African Coloured Asian White

2008 COMMISSIONERS INDABA November 2008 Sun City Conclusions Statistically significant decline in poverty: race, gender of HH head, location Increase in inequality -> driven by inequality between race groups Absolute pro-poor growth but not relative pro-poor growth

2008 COMMISSIONERS INDABA November 2008 Sun City Conclusions Crucial role of social grants at the bottom of the expenditure Increase in inequality has eroded some of the poverty reduction gains of economic growth High initial inequalities = key constraint on poverty reduction