Determinants of Income Mobility and Household Poverty Dynamics in South Africa

39 Pages Posted: 14 Apr 2004

See all articles by Ingrid Woolard

Ingrid Woolard

University of Port Elizabeth - Department of Economics

Stephan Klasen

University of Goettingen (Gottingen) - Faculty of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: February 2004

Abstract

In this paper we analyse household income mobility dynamics among Africans in South Africa's most populous province, Kwazulu-Natal, between 1993 and 1998. Compared to industrialized and most developing countries, mobility has been quite high, as might have been expected after the transition in South Africa. This finding is robust when measurement error is controlled for. When disaggregating the sources of mobility, we find that demographic changes and employment changes account for a most of the mobility observed which is related to rapidly shifting household boundaries and a very volatile labour market in an environment of high unemployment. Using a multivariate analysis, we see that transitory incomes play a large role. We also find four types of poverty traps, associated with large initial household size, poor initial education, poor initial asset endowment and poor initial employment access that dominate the otherwise observed regression towards to the mean.

Keywords: mobility, poverty, South Africa, household structure

JEL Classification: D63, J12, J15, J6

Suggested Citation

Woolard, Ingrid and Klasen, Stephan, Determinants of Income Mobility and Household Poverty Dynamics in South Africa (February 2004). IZA Discussion Paper No. 1030. Available at SSRN: https://ssrn.com/abstract=515943

Ingrid Woolard

University of Port Elizabeth - Department of Economics ( email )

Port Elizabeth 6000
South Africa

Stephan Klasen (Contact Author)

University of Goettingen (Gottingen) - Faculty of Economics and Business Administration ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49-551-397303 (Phone)
+49-551-397302 (Fax)

HOME PAGE: www.vwl.wiso.uni-goettingen.de/klasen.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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