The publications listed here are the results of collaborations between researchers from different ACEIR country nodes and sometimes in collaboration with researchers from ACEIR partner organisations such as national statistical offices.

Demographic challenges for global labor markets in the 21st century, Africa in a changing world

David Lam & Murray Leibbrandt
ACEIR working paper no. 11, November 2023, published jointly with the Southern Africa Labour and Development Research Unit, University of Cape Town (SALDRU working paper no. 303)

The world is projected to add 2.5 billion people to the total population and 1.1 billion people to the working-age population between 2020 and 2100. Almost all the additional working-age people will be added in sub-Saharan Africa, a dramatic change from previous decades, when the growth of the working-age population was concentrated in Asia. This paper analyses the demography of the African labour force in the coming decades using the latest UN population projections. The authors show that by 2050, Africa will be the only region in the world with a growing working-age population; and it will be the only region in which the ratio of dependents to working-age population is falling. On the demand side, Africa needs to produce two million jobs per month by 2040 to keep up with the growth of the working-age population. This rate of job creation is similar to Asia’s during the period in which its working-age population was growing at similar rates. Still, this remains a daunting challenge for Africa in the coming decades. Read more

The socio-economic dimensions of racial inequality in South Africa: A social space perspective

Nicola Branson, Johs Hjellbrekke, Murray Leibbrandt, Vimal Ranchhod, Mike Savage, Emma Whitelaw
ACEIR Working Paper no. 10, September 2023 

It is well evidenced that South Africa is characterised by extreme economic inequality. To complement the extensive body of work on the dynamics of vulnerability and poverty alleviation, this study uses a sociological lens to investigate the structuring of privilege in South Africa. The analysis is a first attempt to systematically map how stocks of economic, cultural, and social capital intersect to generate systematic and structural inequalities in the country, and to consider how far these are associated with fundamental racial divides. To achieve this goal the authors draw on rich, nationally representative data from the National Income Dynamics Study and employ Geometric Data Analysis and Multiple Correspondence Analysis to construct a model of South African ‘social space’. Their findings reveal distinct features of South African social space: 1. the inheritor class reveals the intensely strong interplay between inequalities of economic and cultural capital; 2. there is some evidence that this homogeneity is associated with an enduring racialised divide; 3. the size of the upwardly mobile class indicates that forms of middle-class privilege percolate well beyond a core of the 8% of the population that is white, suggesting fluidity and change in the South African social space; and social capital is strongly delineated by age, with older respondents displaying on average higher levels of trust. The cluster analysis reveals that trust levels increase with economic and cultural capital levels within younger age groups and could, therefore, entrench social and racial divisions. Read more

Framing the potential of climate change interventions to support poverty reduction and promote equity whilst reducing climate risk 

Sheona Shackleton, Nadine Methner, Darlington Sibanda, Roger Few, Mark Tebboth
TSITICA Project Working Paper no 1, April 2022. Cape Town, South Africa: ARUA Centre of Excellence in Climate Change and Development & African Centre of Excellence for Inequality Research. 

The first in a series of working papers, this paper describes the thinking and evidence that frames the TSITICA project’s research agenda, focusing on how local level adaptation interventions can contribute to enhancing livelihoods and reducing poverty and inequality, based on an extensive literature review. It discusses key insights from the climate change and development literature; climate change and poverty literature; climate change and inequality literature; and from the climate change, vulnerability, social justice and equity literature. Read more

Spatial inequality in sub-Saharan Africa 

Muna Shifa, Murray Leibbrandt 
ACEIR Working Paper no. 9, August 2021 

This paper provides within-country spatial and national inequality estimates in sub-Saharan Africa (SSA) using comparable data from the Demographic Health Surveys. Two indicators are used to measure household welfare. First, detailed information on living standards indicators is used to calculate asset indices using data from 24 SSA countries with comparable data in recent years. The inequality estimates based on the asset indices are used to provide contemporary asset inequality estimates in SSA. Results reveal high levels of within-country spatial and national asset inequalities in SSA, with large variations across countries. The second indicator of household welfare is based on data on access to basic services. Access to basic services is measured by deriving an index calculated using indicators such as access to water, sanitation, electricity, a telephone, and education. Changes in inequalities in access to basic services are compared using data from 27 SSA countries that have comparable data for at least two periods between 1995 and 2018. The findings suggest that, apart from a few countries, within-country spatial and national inequalities in access to basic services have declined over time. Nevertheless, the level of inequality and the magnitude of the changes in inequality over time varies greatly across countries, and disparities in access to basic services remain quite large in some SSA countries. Our findings, using both indices, show that within-country regional inequality is a significant component of national inequality in the majority of SSA nations, with significant policy implications. Read more

Inequality in sub-Saharan Africa: A review paper

Rocco Zizzamia, Anda David, Murray Leibbrandt
ACEIR Working Paper no. 8, April 2021 

Very little attention has been paid to African inequality dynamics in high-profile international discussions of changing global inequality despite the fact that African dynamics will become increasingly important to this global discussion. Within the continent, recent years have seen distributional issues becoming more central because of the importance of inequality in inclusive growth. Therefore, the review takes stock of what can be said about African inequality to promote better analysis and better policymaking in addressing inequality on the continent. The authors’ assessment of the drivers of inequality in Africa pays particular attention to the themes of intra-household inequality and gender and also inequality of opportunity and social mobility in Africa. The complexities of household formation and composition, for example the high frequency of polygamous households in some countries, are at the heart of access to resources and, therefore, important for the accurate assessment of inequality in any African context. African inequality analysis always requires that analytic attention be devoted to both rural and urban contexts and the linkages between them. Read more

The impact of taxes and transfers on poverty and income distribution in South Africa 2014/2015

Maya Goldman, Ingrid Woolard, Jon Jellema
ACEIR Working Paper no. 7, January 2021 

This paper applies the Commitment to Equity (CEQ) Assessment Framework to the 2014/15 Living Conditions Survey for South Africa to analyse the progressivity of the main tax and social spending programmes and quantify their impact on poverty and inequality. The tax and social spending system is progressive - the burden of taxes falls on the richest in South Africa and social spending results in sizable increases in the incomes of the poor.  Reductions in poverty and inequality are the largest achieved in the emerging market countries that have so far been included in the CEQ. The analysis by gender shows that the fiscal system is partially responsive to the additional burden of childcare borne by women through social transfers such as the child support grant and public healthcare and education services, and partially responsive to inequality of access to labour opportunities through the progressive direct taxation system. However, these impressive results are partly due to high levels of pre-fiscal inequality in the country and due to valuing in-kind benefits from free government services in education and health at the average cost of provision – they do not take into account the significant variation in the quality of the services provided. Read more

Fiscal incidence, inequality and poverty in Kenya: A CEQ assessment

Damiano K. Manda, Reuben Mutegi, Samuel Kipruto, Moses Muriithi, Paul Samoei, Martine Oleche, Germano Mwabu, Stephen D. Younger
ACEIR Working Paper no. 6, October 2020

The objective of this paper is to evaluate the effects of fiscal policy actions by the government of Kenya on inequality and poverty. The paper uses the Kenya Integrated Household Budget Survey  (KIHBS) dataset for 2015/16 combined with administrative data for the same period to construct various income concepts that are used in an analysis of welfare effects of fiscal measures following  the methodology developed by the Commitment to Equity (CEQ) Institute (Lustig, 2018). The results show that the combined impact of government taxes and expenditure actions is to reduce inequality and increase poverty, a finding that is similar to effects reported in CEQ studies done in other African countries such as Ghana, Tanzania, Uganda and Ethiopia. The study also finds that people in the first six deciles of the income distribution are net beneficiaries of taxation plus all social expenditures, while those in the richer three deciles are net tax payers, indicating that, individually and jointly, taxation and social spending in Kenya are progressive. On a cash-only basis (i.e., excluding in-kind health and education benefits), however, only the first decile is a net beneficiary, largely because indirect taxes are paid by everyone, including the poor. This is despite the fact that, contrary to expectation, indirect taxes in Kenya are generally progressive. However, direct taxes are significantly more progressive than the indirect taxes, i.,e., they are paid at higher rates in richer deciles. Further, cash and near-cash transfers, basic education and health benefits are pro-poor while tertiary education benefits are not. Cash and near-cash transfers lead to a reduction in poverty. Finally, simulation results show that increasing cash transfer to existing beneficiaries by 50% and increasing coverage could lead to greater reduction in poverty and inequality. The main conclusion of the analysis is that Kenya’s fiscal policy can be redesigned to support both inequality and poverty reduction. Read more

Spatial inequality through the prism of a pandemic: COVID-19 in South Africa

Muna Shifa, Anda David, Murray Leibbrandt
ACEIR Working Paper no. 5, October 2020

While the global impact of the COVID-19 pandemic made everyone feel very vulnerable, the pandemic has made manifest the significant gaps between individuals in terms of exposure and in terms of the capacities to cope with such a major shock. The onset of the pandemic has seen a very active and promising response from quantitative social scientists attempting to use available household and labour market surveys to assist in framing evidence-informed emergency and longer-run policy responses. This paper implements two basic profiling frameworks in the South African context using the 2018 General Household Survey and the 2016 Community Survey. The first proposes a set of indicators of a household’s readiness to cope with a lockdown and then aggregates these into an index of lockdown readiness. The second does the same for COVID vulnerability. The authors use these indicators and their aggregate indices to profile lockdown readiness and COVID vulnerability at the national, provincial and municipal levels as well providing an urban/rural breakdown. There are stark inequalities across space in lockdown readiness and in COVID vulnerability and, disturbingly, strong correlations between low readiness and high vulnerability. This has implications for budget allocations in response to the COVID-19 pandemic, especially as some of the government relief funding has been and will be apportioned according to municipal need. Read more

Earnings inequality over the life-course in South Africa

Rocco Zizzamia, Vimal Ranchhod
ACEIR Working Paper no. 4, October 2020

Earnings inequality is usually calculated from a distribution which is measured at a point in time. However, because we typically observe a positive age-earnings profile, a part of cross-sectional inequality is explained by age-related differences in earnings across age cohorts. When inequality is computed using earnings measured over the lifetime, these age-specific differences are averaged out. However, there are also factors that may drive up inequality in earnings measured over time relative to cross-sectional inequality – for instance, low cross-sectional earnings are likely to be correlated with low wage growth and longer spells of unemployment, thereby compounding inequality. Using South African data, the authors investigate how these dynamic processes act simultaneously but over different time scales to both moderate and exacerbate inequality over time. Because the available panel data in South Africa spans only nine years, straightforwardly constructing a measure of lifetime earnings is not possible. The researchers circumnavigate this challenge by constructing a synthetic lifetime panel by stitching together relevantly similar individuals across successive age cohorts. They use this synthetic panel to compute inequality of lifetime earnings and compare this to inequality of earnings measured over the medium term (two to nine years), and to inequality measured at a point in time. The authors find that inequality of lifetime earnings, which reflects the effect of the age/earning relationship, is lower than inequality of contemporaneous earnings. However, inequality of earnings measured over two to nine years, which is more sensitive to inequalities in short-term employment dynamics, is substantially higher than point-in-time estimates. Read more

Understanding the relationship between economic inequality, inequality of opportunity and education outcomes in Ghana

Monica P. Lambon-Quayefio, Robert D. Osei, Abena D. Oduro, Isaac Osei Akoto
ACEIR Working Paper no. 3, October 2020

Using a two-wave nationally representative panel data, the study finds that the contribution of unfair inequality (which is inequality driven by factors beyond the control of individuals) to total consumption inequality in Ghana is not trivial. The authors find that inequality of opportunity accounts for about 8.1% of total consumption inequality in Ghana. Place of birth, the locality of residence and parental education and the presence of parents within the household contribute significantly to inequality of opportunity. While consumption inequality negatively affects learning outcomes, its impact flows entirely through inequality of opportunity. Policymakers are required to be more deliberate in the distribution of social infrastructure and other economic resources across the country so as not to concentrate resources in particular areas, thus leading to the neglect of other parts of the country. Policies that ensure access to education in the current generation are encouraged to minimise unfair inequality in the future. Read more

Exploring the dynamics of micro-level consumption inequality in Ghana

Nkechi S. Owoo, Robert D. Osei, Stephen Afranie
ACEIR Working Paper no. 2, October 2020

Although poverty and inequality are related concepts, they are by no means identical and the use of welfare ratios and household per capita expenditures as proxies for both is inadequate as it endorses the usage of similar policy interventions. This paper proposes another measure of inequality at the micro-level. Household deviation scores are derived from the family of generalised entropy inequality measures, with greater deviation scores from the population mean indicative of greater micro-level inequality. By means of this novel construct, the authors are able to model the correlates of poverty and inequality separately, using a panel dataset for Ghana. They find four different cases of correlations for household poverty and inequality. While some factors are associated with both increasing poverty and inequality, such as urban farming and higher household dependency ratios, other factors are associated with decreasing poverty and inequality such as urbanisation and the provision of social safety nets. Perhaps more interestingly, some factors are associated with increasing (decreasing) poverty but decreasing (increasing) inequality. These findings on variations in the correlates of both poverty and inequality welfare outcomes allow greater policy concentration on not just poverty, as has been the case in many developing countries, but also on inequality. The authors conclude that policy interventions to reduce poverty do not necessarily translate into reductions in inequality. It would be important to design more nuanced interventions, therefore, to ensure that both welfare outcomes – poverty and inequality – are satisfactorily and simultaneously achieved. Read more

Worlds apart: What polarisation measures reveal about sub-Saharan Africa’s growth and welfare distribution in the last two decades

Fabio Clementi, Michele Fabiani, Vasco Molini, Rocco Zizzamia
ACEIR Working Paper no. 1, 2019

Sub-Saharan Africa’s (SSA) development path over the past two decades has been characterised by sluggish poverty reduction occurring alongside robust economic growth. While in this context we would expect inequality to increase, standard synthetic measures provide little evidence of a generalisable uptick in inequality over this period. The authors argue that the standard empirical toolkit available to development economists working on SSA has limited the ability to understand the role that distributional change plays in the persistence and reproduction of poverty on the continent. For this reason, they propose that supplementing inequality measures with the analysis of polarisation provides a cleaner distributional lens through which to make sense of SSA’s poverty performance during this period of growth. Applying polarisation measures to comparable survey data from 24 SSA countries, the authors find that there has been a generalisable increase in polarisation over the past two decades – and in particular, an increased concentration of households in the lower tail of the relative distribution. That this inegalitarian trend is overlooked when using standard synthetic inequality measures confirms the authors' hypothesis that the current toolkit represents a technical bottleneck to understanding the effects of distributional trends on poverty reduction in sub-Saharan Africa – and that polarisation analysis may help overcome this. Read more