SALDRU Working Papers

Title: Wealth in the National Income Dynamics Study Wave 2
Author(s): Reza C. Daniels, Arden Finn and Sibongile Musundwa
Date of Publication: May 2012

Introduction

This document investigates the composition and distribution of individual and household wealth in the National Income Dynamics Study (NIDS) Wave 2 dataset (SALDRU, 2010-2011). The NIDS Wave 2 instrument marks the first time in South Africa that a nationally representative household survey obtained sufficient information to calculate individual and household net worth. As such, it represents a very important contribution to the stock of knowledge on these concepts, and the dataset itself also contains rich information on concepts related to wealth, such as income, expenditure, savings and debt.

Title: Income Mobility in South Africa: Evidence from the First Two Waves of the National Income Dynamics Study
Author(s): Arden Finn, Murray Leibbrandt and James Levinsohn
Date of Publication: May 2012

Introduction

As is clear from the title of the National Income Dynamics Study (NIDS), one of the major reasons for undertaking South Africa's first national panel study has been to gain an understanding of income mobility. In 2008, a nationally sampled set of South African residents were visited for the first time in wave 1 of NIDS. During this visit, the baseline information was gathered to track and understand changes in their well-being going forward. This sample was nationally representative in order for NIDS to provide an assessment of these changes at the aggregate level. Also, it was large enough to enable NIDS to provide information on key sub-sets of this national story. We need to know who is making progress in terms of escaping poverty, or at least increasing their real income and what factors are driving this. Also, we need to know who is persistently poor and why.

Title: Education: Analysis of the NIDS Wave 1 and 2 Datasets
Author(s): Nicola Branson, David Lam and Linda Zuze
Date of Publication: May 2012

Introduction

Education is a major focus of attention in the National Income Dynamics Study (NIDS). With the release of Wave 2 NIDS provides the first longitudinal data ever collected on education in a national household survey in South Africa. This makes it possible to study transitions in and out of school and transitions across grades in ways that have never before been possible. This report analyzes NIDS Wave 1 and 2 data corresponding to the sections of the questionnaires that are most specifically related to education –Module C of the child questionnaire, Module H of the adult questionnaire, and Module E of the proxy questionnaire. While many of the questions in these modules are similar to questions on other national surveys, tracking the same individuals across time allows us to identify changes over time while controlling for individual level characteristics. NIDS collects schooling information at each wave and for intermediate years. As such, by wave 2 there is information on the respondent's grade and enrolment status for each year 2007 (the year before Wave 1) through 2010 (the year of Wave 2). In addition, the outcome for each year 2007 through 2009 is collected.

Title: Health: Analysis of the NIDS Wave 1 and 2 Datasets
Author(s): Cally Ardington and Boingotlo Gasealahwe
Date of Publication: May 2012

Introduction

This report examines the health data from the second wave of the NIDS with a view to assessing the strengths and weakness of the data and highlighting the potential of the NIDS panel for the analysis of the relationship between health status and socio-economic status in South Africa. We begin by investigating associations between health and changes in the panel composition. We then examine data quality both within and between the waves, focussing on item non-response within waves and data consistency between waves. The final section examines changes in nutritional status between the waves of the panel. The analyses in this report are descriptive, preliminary and very much intended to illustrate the potential of the NIDS panel for furthering our understanding of the links between health and socio-economic status.

Title: Self-assessed well-being: Analysis of the NIDS Wave 1 and 2 Datasets
Author(s): Dorrit Posel
Date of Publication: May 2012

Introduction

Most nationally representative household surveys in South Africa collect data on money-metric measures of well-being (income and expenditure), which are then used to generate statistics on poverty and inequality. However, these measures may be limited in several ways. First, they typically are not able to identify differences in economic well-being within the household when all resources in the household are not equally shared. Second, income received or spent captures only one aspect of economic status specifically and of well-being more generally, and a wide range of other factors will also affect an individual's quality of life.

Title:  Labour Market: Analysis of the NIDS Wave 1 and 2 Datasets
Author(s): Paul Cichello, Murray Leibbrandt and Ingrid Woolard
Date of Publication: May 2012

Introduction

This paper provides a brief summary of key labour market outcomes in Wave 2 of NIDS and also examines labour market transitions that occurred between Wave 1 and Wave 2. This corresponds approximately to changes between 2008 and 2010. The primary purpose of this paper is to spur discussion of these initial findings and to encourage more detailed analytical work on the labour market using the NIDS data.

Title: Contribution Norms in Heterogeneous Groups: A Climate Change Framing
Author(s): Zoe Van der Hoven, Martine Visser and Kerri Brick
Date of Publication: May 2012
Classification-JEL: H41, Q54, Q58
Keywords: public good; contribution norm; communication; heterogeneity; climate change

Abstract

While results from public good games with homogeneous players reflect the contribution norm of equal contributions, it is unclear what contribution norm will arise in a heterogeneous setting. Climate change is a perfect example of a social dilemma involving heterogeneous agents. As such, using a public good game with a climate change framing, this study examines what contribution norm arises when players are asymmetric in terms of their impact on the public good (mitigation). The climate change framing exacerbates equity considerations and ultimately increases the difficulty of finding a generalizable concept of fairness (contribution norm) acceptable to both player-types. The efficacy of communication as a means to promoting public good provision is also considered. The default contribution norm, irrespective of player-type, was to free-ride. With the introduction of communication, two dominant contribution norms emerge: free-riding and perfect cooperation.

Title: Electoral Rules and Clientelistic Parties: A Regression Discontinuity Approach
Author(s): Miquel Pellicer and Eva Wegner
Date of Publication: May 2012
Classification-JEL:
Keywords:

Abstract

This paper studies the causal effect of electoral systems on the performance of clientelistic vs. programmatic parties. We argue that, contrary to majoritarian systems, proportional systems disfavor clientelistic parties as voters can hardly be pivotal for electing their local patron. We test this insight using data from local elections in Morocco from 2003 and 2009. We use a regression discontinuity approach exploiting the fact that the law stipulates a population threshold below which the system is majoritarian and above which it is proportional. Results show a differential causal effect of proportional systems on programmatic and clientelistic parties: Clientelistic parties halve their seats and the programmatic party doubles them when crossing the threshold of proportionality. An important caveat is that the sample size around the threshold being relatively small, some coefficients are estimated relatively imprecisely. Fixed effects estimates exploiting a change in threshold from 2003 to 2009 yield qualitatively similar results.

Title:  Education and Inequality: The South African Case
Author(s): Nicola Branson, Julia Garlick, David Lam and Murray Leibbrandt
Date of Publication: April 2012
Classification-JEL:
Keywords:

Abstract

Following the international literature, income inequality decompositions on data from contemporary South Africa show that the labour market is the key driver of overall household inequality. In order to understand one of the channels driving this labour market inequality, we use national household survey data to review changing returns to education in the South African labour market over the last 15 years; with a focus on both the returns to getting employment as well as the earnings returns for those that have employment. We show that South Africa has experienced a skills twist with the returns to matric and post-secondary education rising and the returns to levels of education below this remaining constant. Then, based on a regression based decomposition of earnings inequality, we show how this has impacted earnings inequality. Indeed, the increase in returns to post-secondary education has directly counteracted the equalising gains that have been made by increased educational attainment, resulting in consistent levels of inequality over time.

Title: Government spending, corruption and economic growth
Author(s): G. d’Agostino, J.P Dunne, and L. Pieroni
Date of Publication: March 2012
JEL Classification: O57, H5, D73
Keywords: corruption; military spending; development economics; panel data; Africa

Abstract

This paper considers the effects of corruption and government spending on economic growth. It starts from an endogenous growth model and extends it to account for the detrimental effects of corruption on the potentially productive components of government spending, namely military and investment spending. The resulting model is estimated on a sample of African countries and the results show, first, that the growth rate is strongly influenced by the interaction between corruption and military burden, with the interaction between corruption and government investment expenditure having a weaker effect. Second, allowing for the cyclical economic fluctuations in specific countries leaves the estimated elasticities close to those of the full sample. Third, there are significant conditioning variables that need to be taken into account, namely the form of government, political instability and natural resource endowment. These illustrate the cross country heterogeneity when accounting for quantitative direct and indirect effects of key variables on economic growth. Overall, these findings suggest important policy implications.