Investigating transitory and chronic poverty in South Africa, 2008-2015

Type Thesis or Dissertation - Master of Commerce in Economics
Title Investigating transitory and chronic poverty in South Africa, 2008-2015
Publication (Day/Month/Year) 2018
URL file:///C:/Users/DKCSAM001/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempState/Do​wnloads/kruger_mcom_ems_2018 (1).pdf
In post-apartheid South Africa, the thrust of macroeconomic framework and corresponding policies inaugurated by the first democratically elected government have been geared towards, amongst others, poverty alleviation, employment creation and economic growth. To date, South Africa still faces many challenges in the fight against poverty. These challenges are characterised by a dynamic nature, in that certain people transition in and out of poverty, whilst others remain deeply rooted in chronic poverty. Injecting resources towards addressing this complex nature of poverty is still one of the major problems faced by the South African government.

In spite of the fact that there are many money-metric studies on poverty in South Africa, these studies failed to accurately depict the dynamic nature of poverty; throughout the years, many studies have only attempted to examine poverty using static analysis by comparing cross-sectional household surveys. It is for this foremost mentioned reason that these studies have produced information that is inadequate for the elimination of persistent poverty. Examining and identifying the characteristics of the different groups of poor using longitudinal data for the purpose of comparing poverty levels and trends observed over time perhaps better capture the nature of poverty in South Africa. Hence, in this study, panel data will be utilised to investigate the dynamic aspect of poverty for the evaluation of dynamics at the individual level.

Using the balanced component of the panel data from the first four available waves of the National Income Dynamics Study (NIDS) conducted in 2008-2015, the empirical findings indicate that the followings individuals are significantly more likely to be chronically poor: female Africans without Matric, aged younger than 25 years at the time of the first wave in 2008 (mean age being slightly above 20 years), living in traditional areas or farms in the KwaZulu-Natal, Eastern Cape, Limpopo, Northern Cape, Mpumalanga and Free State provinces, and inactive in the labour market. Also, they came from households headed by unemployed female Africans with relatively higher mean dependency ratio (above one) and household size (about seven) with either none or only one employed member, as well as associated with a greater likelihood of the households receiving social grant income and having inferior non-income welfare

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