Arden Finn

Describing and decomposing post-apartheid income inequality in South Africa

This paper describes the changes in inequality in South Africa over the post-apartheid period, using income data from 1993 and 2008. Having shown that the data are comparable over time, it then profiles aggregate changes in income inequality, showing that inequality has increased over the post-apartheid period because an increased share of income has gone to the top decile. Social grants have become much more important as sources of income in the lower deciles. However, income source decomposition shows that the labour market has been and remains the main driver of aggregate inequality. Inequality within each racial group has increased and both standard and new methodologies show that the contribution of between-race inequality has decreased. Both aggregate and within-group inequality are responding to rising unemployment and rising earnings inequality. Those who have neither access to social grants nor the education levels necessary to integrate successfully into a harsh labour market are especially vulnerable.

Income mobility in a high-inequality society: Evidence from the first two waves of the National Income Dynamics Study

The study of income inequality and income mobility has been central to understanding post-apartheid South Africas development. This paper uses the first two waves of the National Income Dynamics Study to analyse income mobility using longitudinal data, and is the first to do so at a nationally representative level. We investigate both the correlates and root causes of moving up and down the income distribution over time. Using both absolute and relative changes as reference points, we highlight some of the factors associated with South Africans moving into and out of poverty.

Wealth data quality in the National Income Dynamics Study Wave 2

This paper examines the quality of data on household assets, liabilities and net worth in the South African National Income Dynamics Study (NIDS) Wave 2. The NIDS is the first nationally representative survey on household wealth in South Africa. The cross-sectionally weighted data are found to be fit for use in terms of the univariate distributions of net worth, assets and liabilities, but population totals are probably underestimated due to the presence of missing wealth data in Phase 2 of Wave 2 that is not taken into account in the weights. When compared with national accounts estimates of household net worth, there is an apparent inversion of the estimated totals of financial assets versus non-financial assets. Further research is required into why this is so. We find that the NIDS wealth module is a suitable instrument for the analysis of household wealth.

Income mobility in a high-inequality society: Evidence from the first two waves of NIDS

The study of income inequality and income mobility has been central to understanding post-apartheid South Africas development. This paper uses the first two waves of the National Income Dynamics Study to analyse income mobility using longitudinal data, and is the first to do so at a nationally representative level. We investigate both the correlates and root causes of moving up and down the income distribution over time. Using both absolute and relative changes as reference points, we highlight some of the factors associated with South Africans moving into and out of poverty.