Production, inequality and poverty linkages in South Africa

 

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dc.contributor.author Ngepah, Nicholas
dc.date.accessioned 2016-02-18T08:53:33Z
dc.date.available 2016-02-18T08:53:33Z
dc.date.issued 2010
dc.identifier.citation Ngepah, N. (2011). Production, inequality and poverty linkages in South Africa. Economic Research Southern Africa (ERSA) Working Paper, 1-18. en_ZA
dc.identifier.uri http://hdl.handle.net/11427/17100
dc.description.abstract The Kuznets inequality-development hypothesis can be tested with time-series data rather than the cross-section analyses found in earlier literature. Single-country time-series analysis cannot be done without addressing endogeneity between output and inequality. South Africa has been under-researched in this area due to a lack of data. Recent data released by the Presidency of South Africa makes such analysis possible. Besides, the use of a single inequality index in such a multiracial society is likely to capture only average effects. This paper jointly estimates production, inequality (decomposed by sub-group) and poverty with 3sls using South African data. The findings suggest that production is affected negatively by between-group inequality. Credit constraints and interracial tensions are possible causes, generating significant adverse effects that stifle economic productivity. Within-group inequality enhances production, possibly due to within-group social capital. There is evidence of an inverted U-shape relationship between per capita income and between-group inequality, but a U-shaped one between per capita income and within-group inequality. However due to the effects of the active post-apartheid policies — which reduce between-group inequality, but increase within-group inequality — it is doubtful if this relationship is capturing a Kuznets process. There is a significant poverty-increasing (reducing) effect of total and between-group inequalities (output). The abjectly poor seem to suffer more from inequality than others do. Policy efforts have to focus on reducing between-group inequality. en_ZA
dc.language eng en_ZA
dc.subject production en_ZA
dc.subject income distribution en_ZA
dc.subject poverty en_ZA
dc.subject 3sls en_ZA
dc.subject South Africa en_ZA
dc.title Production, inequality and poverty linkages in South Africa en_ZA
dc.type Working Paper en_ZA
dc.date.updated 2016-02-12T13:45:39Z
uct.type.publication Research en_ZA
uct.type.resource Working paper en_ZA
dc.publisher.institution University of Cape Town
dc.publisher.faculty Faculty of Engineering and the Built Environment
dc.publisher.department Energy Research Centre en_ZA
uct.type.filetype Text
uct.type.filetype Image
dc.identifier.apacitation Ngepah, N. (2010). <i>Production, inequality and poverty linkages in South Africa</i> University of Cape Town ,Faculty of Engineering & the Built Environment ,Energy Research Centre. Retrieved from http://hdl.handle.net/11427/17100 en_ZA
dc.identifier.chicagocitation Ngepah, Nicholas <i>Production, inequality and poverty linkages in South Africa.</i> University of Cape Town ,Faculty of Engineering & the Built Environment ,Energy Research Centre, 2010. http://hdl.handle.net/11427/17100 en_ZA
dc.identifier.vancouvercitation Ngepah N. Production, inequality and poverty linkages in South Africa. 2010 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/17100 en_ZA
dc.identifier.ris TY - Working Paper AU - Ngepah, Nicholas AB - The Kuznets inequality-development hypothesis can be tested with time-series data rather than the cross-section analyses found in earlier literature. Single-country time-series analysis cannot be done without addressing endogeneity between output and inequality. South Africa has been under-researched in this area due to a lack of data. Recent data released by the Presidency of South Africa makes such analysis possible. Besides, the use of a single inequality index in such a multiracial society is likely to capture only average effects. This paper jointly estimates production, inequality (decomposed by sub-group) and poverty with 3sls using South African data. The findings suggest that production is affected negatively by between-group inequality. Credit constraints and interracial tensions are possible causes, generating significant adverse effects that stifle economic productivity. Within-group inequality enhances production, possibly due to within-group social capital. There is evidence of an inverted U-shape relationship between per capita income and between-group inequality, but a U-shaped one between per capita income and within-group inequality. However due to the effects of the active post-apartheid policies — which reduce between-group inequality, but increase within-group inequality — it is doubtful if this relationship is capturing a Kuznets process. There is a significant poverty-increasing (reducing) effect of total and between-group inequalities (output). The abjectly poor seem to suffer more from inequality than others do. Policy efforts have to focus on reducing between-group inequality. DA - 2010 DB - OpenUCT DP - University of Cape Town KW - production KW - income distribution KW - poverty KW - 3sls KW - South Africa LK - https://open.uct.ac.za PB - University of Cape Town PY - 2010 T1 - Production, inequality and poverty linkages in South Africa TI - Production, inequality and poverty linkages in South Africa UR - http://hdl.handle.net/11427/17100 ER - en_ZA


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