Correlates of Vulnerability in the South African Labour Market

DPRU Working Paper No. 99/27

42 Pages Posted: 11 Jun 2007

See all articles by H. Bhorat

H. Bhorat

University of Cape Town (UCT) - Development Policy Research Unit

Murray Leibbrandt

Southern Africa Labour and Development Research Unit; University of Cape Town (UCT) - Faculty of Commerce

Date Written: May 1999

Abstract

Using the October Household Survey of 1995 (OHS95), this paper seeks to understand the determinants of indigence in the South African labour market. To this end the study presents a description of the labour market, focusing on how covariates such as race, gender, education and location help explain the poverty observed in the labour market.

A key innovation of the paper is the application of traditionally household poverty measures to individuals in the labour market. Hence through utilising cumulative distribution functions drawn from the Foster, Greer, Thorbecke (FGT) class of poverty measures, we are able to understand the distribution of earnings within a stochastic dominance framework. Such distribution functions are then derived for a series of labour market categories ranging from employment by race to employment by sector and occupation. In addition, by setting two individual poverty lines, specific measures of poverty are also determined according to the different labour market cohorts.

Some of the key results of the study are that farm workers and household domestic workers constitute the most vulnerable individuals amongst the employed. In addition, apart from race, gender and education are crucial determinants of low or zero earnings. Rural labour markets also surface as a key component of poverty in the labour force. Finally, there is sufficient evidence to suggest that a different labour market seems to be operating for Africans and Coloureds on the one hand, and Asians and Whites on the other.

Keywords: houserhold poverty measures, labour markets, employment by race

Suggested Citation

Bhorat, Haroon I. and Leibbrandt, Murray Victor, Correlates of Vulnerability in the South African Labour Market (May 1999). DPRU Working Paper No. 99/27. Available at SSRN: https://ssrn.com/abstract=992203 or http://dx.doi.org/10.2139/ssrn.992203

Haroon I. Bhorat (Contact Author)

University of Cape Town (UCT) - Development Policy Research Unit ( email )

Private Bag
Rondesbosch, 7700
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27 21 423 2501 (Fax)

Murray Victor Leibbrandt

Southern Africa Labour and Development Research Unit ( email )

University of Cape Town
Private Bag X03
Rondebosch 7701, 7701
South Africa

University of Cape Town (UCT) - Faculty of Commerce ( email )

Rondebosch 7701
South Africa

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