Asymmetric response of poverty to growth and inequality in South Africa: Implications for current and future shocks
Investigates the effect of economic growth on poverty reduction, given inequality in South Africa.
Abstract
This study investigates the effect of economic growth on poverty reduction, given inequality in South Africa. It focuses on whether the poor suffer more losses of welfare during economic recessions and depressions than they gain during expansions, and the factors that can assist the poor to stay afloat during times of economic shocks. Individuals in micro data set are matches with municipality level data and in binary, truncated, panel, instrumental variables, and quantile regression techniques to estimate poverty and welfare effects of positive and negative economic growth rates. The study finds that, while economic growth reduces poverty, it is not enough to compensate for the poverty raising effects of inequality. Moreover, economic decline raises poverty, but economic prosperity more than compensates by a higher magnitude.
This research is part of the Capacity for Economic Research and Policy making in Africa (CERPA) programme.
Citation
Ngepah N. ‘Asymmetric response of poverty to growth and inequality in South Africa: Implications for current and future shocks’ 2024