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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
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Introduction Release of New Data, Enables a 10-year Overview 2008 COMMISSIONERS INDABA 19 - 21 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
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City CategoryHeadcount RatePoverty Gap Ratio Year1995200519952005 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
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Share in population & poverty 19952005 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%
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Poverty shifts by gender of household head CategoryHeadcount RatePoverty Gap Ratio Year1995200519952005 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%
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Poverty shifts without poverty lines: Cumulative distribution functions (cdf) South africa
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Cumulative distribution functions (cdf) Gender of hh head
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Shifts in inequality: gini coefficients Category19952005 African0.550.56 Coloured0.490.58 Asian0.450.53 White0.390.45 Total0.640.69
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Lorenz curves for Africans and Whites
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Inequality within and between groups (using the theil index) 19952005 By Race Within-group component0.4330.511 (53.15%)(50.35%) Between-group component0.3810.504 (46.85%)(49.65%) Total Inequality (Theil-T)0.8141.014 (100%)
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Growth incidence curve for South Africa: 1995 - 2005
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Per capita grant income as share of Total wage and grant income 1999 and 2005
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Access rates of state transfers in South Africa, 1995 - 2005
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2008 COMMISSIONERS INDABA 19 - 21 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
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Elasticities of poverty measures For South Africa CategoryR322 Poverty LineR174 Poverty Line Year1995200519952005 P1-Mean Expenditure Elasticity-1.02-1.33-1.63-2.17 P1-Gini Elasticity3.796.309.9617.05 MPRS: P13.724.746.127.86
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2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City Datt-Ravallion Decompositions: 1995 - 2005 Category Growth Component Redistribution Component Total Change in Poverty Poverty Line R322 per month Total-28.724.1-4.50 African-29.723-6.7 Coloured-34.629.8-4.8 Asian-11.915.63.7 White-2.902.80-0.20 Poverty Line R174 per month Total-30.3022.10-8.20 African-32.8021.80-11.00 Coloured-25.8023.50-2.30 Asian-5.506.300.80 White-1.100.90-0.20
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2008 COMMISSIONERS INDABA 19 - 21 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
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2008 COMMISSIONERS INDABA 19 - 21 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
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