Fat tales of South Africa’s income distribution

5 March, 2013 - 13:00
Martin Wittenberg
Room 4.29, Leslie Social Science Building
Abstract / Description: 

I investigate labour earnings in the top tail (± top 12%) of the South African income distribution from 1995 to 2007, using a new harmonised data set constructed from the OHSs and LFSs (Kerr et al 2011). Nonparametric techniques suggest that the distribution is well approximated by a Pareto distribution. Surprisingly, this distribution seems to have been remarkably stable over the entire period. Parametric estimates suggest that the tail parameter is around 1.8, which suggests that the distribution is “fat tailed”. This implies that extreme outcomes are more common than with the standard “normal” distribution. I discuss some of the implications of such fat tails for the way we think about inequality.

CSSR/Afrobarometer Summer School

Photo by Raymond Botha ([The Monday Paper](http://www.uct.ac.za/mondaypaper/)).

Thirty young researchers from across Africa joined with UCT students in the first of the new intensive CSSR/Afrobarometer Summer Schools in January 2013. Participants took either an introductory or an advanced course in social statistics, together with courses focused on specific topics in the study of politics and policy-making in Africa. Participants were required to complete a mini research project and to present this on the final day of the School. Classes were taught by CSSR academics Profs Bob Mattes, Jeremy Seekings and Rajen Govender, and Dr Pedro Wolf, with additional help from Dr Eduard Grebe and Erica Penfold. Outside lecturers included Prof Joel Barkan, and Drs Danielle Resnick and Boniface Dulani. Participation in the School was funded by the Afrobarometer network and the UCT Vice-Chancellor's Strategic Fund.

Wage Setting in the South African Clothing Industry

19 February, 2013 - 13:00
Nicoli Nattrass and Jeremy Seekings
CSSR seminar room, Leslie Social Science 4.29
Abstract / Description: 

Minimum wages in the South African clothing industry are set by mostly metro-based capital-intensive employers and organised labour in the National Bargaining Council for the Clothing Manufacturing Industry (NBC). These wages are routinely extended by the Minister of Labour to cover all firms. Firms that do not comply with the agreement are pursued through the courts and eventually shut down by the NBC. We have argued elsewhere that this has been harmful for labour-intensive growth. In this seminar, we summarise the argument briefly and then discuss recent wage-setting agreements that seek to reduce wage pressure on firms and job losses in non-compliant firms in South Africa.

Debating job destruction in the clothing industry

Research by Nicoli Nattrass and Jeremy Seekings (published as CSSR WP323 as well as by the Centre for Development and Enterprise) has been making waves. This week there was extensive coverage in Business Day and the Financial Mail. Business Day has a short video on the issue, and Nicoli Nattrass's talk on Tuesday 29 January. There was extensive debate on Cape Talk, prompted by an interview with Nicoli by John Maytham (listen to the 9-minute podcast on http://www.capetalk.co.za/pages/podcast/podcasts.asp: Scroll down through the Daily Audio Highlights until you get to "Prof Nicoli Nattrass - Wage Determinations").

Job destruction!

Nicoli Nattrass spoke at a press conference in Johannesburg today on new research on job destruction in South Africa's clothing industry. This week the High Court is hearing a case brought against the Minister of Labour and the National Bargaining Council for the Clothing Manufacturing Industry, by a group of employers in Newcastle, KZN, contesting the legality of aspects of South Africa's minimum wage-setting mechanisms. Also this week, writs of execution are due to be served on hundreds of factories that are not compliant with minimum wages, closing them down and putting thousands of workers out of work. A working paper on the current crisis in the clothing industry by Nicoli Nattrass and Jeremy Seekings is available through the CSSR and the Johannesburg-based Centre for Development and Enterprise.

Does the grant system incentivise women to harm their children?

PhD student (in Sociology and the CSSR) Gabby Kelly was quoted in an article by Rebecca Davis, published in the online Daily Maverick, debunking reports that some South African women drink whilst pregnant in order to harm their children. Sky News published a sensationalist report claiming that women are so desparate to access the more generous care dependency grant rather than the more modest child support grant.that they drink whilst pregnant in order to ensure that their children are born with foetal alcohol syndrome, a disability which may render them eligible for the care dependency grant. But the consensus among academic researchers is that there is no evidence for this.

New Research on Identification, Biometrics & Social Protection

The CSSR has received funding for a project on the uses of new technology in cash transfer programmes. Across Africa, governments, donors and NGOs are promoting cash transfer programs as effective means of poverty alleviation. These forms of social protection are viewed as promising ways to meet human development goals and, in some cases, political or human rights in themselves. Indeed, social protection programs represent one of the more significant forms of public service delivery in Africa today, though the political ramifications of their implementation are only starting to receive sustained attention. This new research will specifically address the ways in which beneficiaries are being personally identified.

Three CSSR students awarded PhDs in Economics

Fidelis Hove, Nicoli Nattrass, Tafara Ngwaru & Eduard Grebe. Photo by Janneke van Rooyen.

On 14 December, three CSSR students, all supervised by Prof Nicoli Nattrass, were awarded PhDs in Economics. The three students were supported financially by the CSSR and worked on various aspects of the HIV/AIDS epidemic in Africa. Fidelis Hove's thesis examined the use of HIV prevalence estimates in regression models (including evidence from Zimbabwe and on the relationship between armed conflict and HIV). Tafara Ngwaru investigated the impact of socio-economic status and other structural drivers on HIV in Southern Africa, while Eduard Grebe's thesis focused on 'civil society leadership' on AIDS in South Africa and Uganda. Eduard will rejoin the CSSR as a postdoctoral fellow in January 2013.

New book by Mike Morris launched

Mike Morris - former CSSR director, and professor in UCT's School of Economics - has a new book, coauthored with Dave Kaplan (of UCT's School of Economics) and Raphael Kaplinsky (from the Open University in the UK). One Thing Leads to Another: Promoting Industrialisation by Making the Most of the Commodity Boom in Sub-Saharan Africa examines how Africa can build on high commodity prices to industrialise. The book is based on research conducted through the research unit PRISM, which was part of the CSSR, and is now wholely located in the School of Economics at UCT. The book was launched at the Cape Town summit of the "Capturing the Gains" research programme. It can be bought from online booktores, or downloaded for free through PRISM..

CSSR research on young South Africans

The CSSR has long been active in researching the experiences of, and the challenges and opportunities facing, young people in South Africa. Jeremy Seekings, Bob Mattes, Elena Moore, Ariane De Lannoy and Pedro Wolf conducted research for the Centre for Development and Enterprise, which recently published a summary report which in turn has received some publicity in the press. Jeremy's work focused on experiences in the labour market, and especially the ways in which inequalities are reproduced between generations. Bob's research focused on young people's attitudes towards democratic citizenship. Elena considered transitions in family life, Pedro considered health-compromising behaviours, and Ariane examined schooling and education.

New working papers by students in the CSSR

The CSSR has just published seven Working Papers written by students in the CSSR. Amy Thom has co-authored two papers on her research into food boxes and food security. Beth Vale's three papers draw on her research into community health workers. Sam Telzak's paper examines social mobility, while Zoe Gauld's examines the possibility of replacing a purely race-targeted system with a points-based system for admissions into medical schools.

AIDS research in CSSR 2012

CSSR researchers continue to conduct and publish research on social, economic and political aspects of HIV-AIDS and related illnesses, and to edit and contribute to online media. Publications in 2012 included one book (Nicoli Nattrass' The AIDS Conspiracy: Science Fights Back), seven articles in peer-reviewed journals, six CSSR Working Papers, and six students' theses and dissertations, as well as many shorter publications. A full list is attached.

Video: Nicoli Nattrass's Potter Talk on the unemployment challenge in South Africa

Nicoli Nattrass recently gave a Potter Talk on the topic "The Unemployment Challenge in South Africa". The video is now online and can be watched below. The Potter Talks are a series of exciting and thought provoking short lectures given by prominent academics, thought leaders, innovators and students on issues affecting civil society in South Africa, organised by the David and Elaine Potter Foundation. The goal of the talks is to inspire, educate and engage.

CSSR seminar series restarts this Thursday with a seminar by Beatrice Conradie

Dr Beatrice Conradie

Dr Beatrice Conradie, director of the Sustainable Societies Unit, will present the first seminar of the CSSR's seminar series for the second semester. Her seminar is titled "Is lethal control of predators an effective strategy against livestock losses?: Ceres hunting club, 1979 to 1987". The seminar's abstract is given below:

Farmers the world over get emotional about predators. In South Africa an absolute war erupted around Cape Nature’s recent restriction of the lethal control options available to farmers. Farmers’ position is that they cannot afford to stop hunting predators, while Cape Nature has indicated that indiscriminate killing must be stopped for predator populations to have any chance of stabilising. In the face of these widely diverging opinions we have surprisingly little hard evidence of the effect of predator hunting on subsequent livestock losses in South Africa. This paper uses a 152-farm nine-year panel of predator hunting and livestock loss data to explore whether lethal control is effective in reducing farm-level livestock losses. Results show a positive relationship between lethal control and subsequent livestock losses which provides some support for the Cape Nature position.

Seminars start promptly at 12:45 on Thursdays in the CSSR Seminar Room (4.29, Leslie Social Science Building). Lunch will be served.