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Pro-Poor Economic Growth and the Labour Market in South Africa: Exploring the Interactions

Pro-Poor Economic Growth and the Labour Market in South Africa: Exploring the Interactions. 2008 Commissioners Indaba 19 – 21 st November 2008 Sun City, North West Province. Haroon Bhorat. Introduction. Consistent Positive Economic Growth post-1994.

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Pro-Poor Economic Growth and the Labour Market in South Africa: Exploring the Interactions

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

  2. Introduction • 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 19 - 21 November 2008 Sun City Release of New Data, Enables a 10-year Overview

  3. Poverty shifts by race 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  4. Share in population & poverty 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  5. Poverty shifts by gender of household head 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  6. Poverty shifts without poverty lines: Cumulative distribution functions (cdf) South africa 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  7. Cumulative distribution functions (cdf) Gender of hh head 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  8. Shifts in inequality: gini coefficients 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  9. Lorenz curves for Africans and Whites 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  10. Inequality within and between groups (using the theil index) 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  11. Growth incidence curve for South Africa: 1995 - 2005 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  12. Per capita grant income as share of Total wage and grant income 1999 and 2005 1800 100 90 1600 80 1400 70 1200 60 1000 50 800 40 600 30 400 20 200 10 0 0 1 2 3 4 5 6 7 8 9 deciles mean monthly per capita grant +wage income 1999 mean monthly per capita grant + wage income 2005 share of per capita grant income in per capita grant + wage income 1999 share of per capita grant income in per capita grant + wage income 2005 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  13. Access rates of state transfers inSouth Africa, 1995 - 2005 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  14. Elasticities of poverty measures for South africa • Poverty Growth Elasticity Measure: • % change in poverty due to 1 % growth in pc expenditure • distribution neutral • Poverty Inequality Elasticity: • % change in poverty due to 1 % increase in the Gini • Marginal Proportional Rate of Substitution (MPRS): • increase in mean expenditure required to mitigate against increasing inequality (1% increase in Gini 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  15. Elasticities of poverty measures For South Africa 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  16. Datt-Ravallion Decompositions: 1995 - 2005 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

  17. 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 19 - 21 November 2008 Sun City

  18. 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 2008 COMMISSIONERS INDABA 19 - 21 November 2008 Sun City

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