An Assessment of Drivers, Constraints and ... - World Bank

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Overcoming Poverty and Inequality in South Africa

An Assessment of Drivers, Constraints and Opportunities

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

OVERCOMING POVERTY AND INEQUALITY IN SOUTH AFRICA

An Assessment of Drivers, Constraints and Opportunities

March 2018

? 2018 International Bank for Reconstruction and Development / The World Bank

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Washington DC 20433

Telephone: 202-473-1000

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This work is a product of the staff of The World Bank in close collaboration with the National Planning Commission Secretariat at the Department of Planning, Monitoring and Evaluation, and Statistics South Africa. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

RIGHTS AND PERMISSIONS

The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given.

Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@ .

Front and back cover: Kya Sands/Bloubosrand, Johannesburg, South Africa @Johnny Miller / Unequal Scenes

The report was edited by William B. Hurlbut and designed and typeset by Shereno Printers, Gauteng, South Africa.

An Assessment of Drivers, Constraints and Opportunities iii

ABBREVIATIONS AND ACRONYMS

AfDB AsgiSA

B-BBEE BCEA BRICS CGE CPI CSG CSP DAFF

DG DPME

EPWP ETI FPL GDP GEAR GHS GIC GNI HFIAS HIV

African Development Bank Accelerated and Shared Growth Initiative for South Broad-Based Black Economic Empowerment Basic Conditions of Employment Act Brazil, Russia, India, China and South Africa Computable General Equilibrium Consumer Price Indexes Child Support Grant Community, social, and public Department of Agriculture, Forestry and Fisheries Disability Grant Department of Planning, Monitoring and Evaluation Expanded Public Works Programme Employment Tax Incentive Food Poverty Line Gross domestic product Growth, Employment and Redistribution General Household Survey Growth Incidence Curves Gross National Income Household Food Insecurity Access Scale Human Immuno-Deficiency Virus

HOI IES ILO ISRDP

LBPL LCS LRA MPI NDP NIDS NMW OAG QLFS RIF SAMPI

SASSA SD SMME Stats SA TES UBPL UNDP WDI

Human Opportunity Index Income and Expenditure Survey International Labor Organization Integrated Sustainable Rural Development Program Lower bound poverty line Living Conditions Survey Labour Relations Act Multidimensional Poverty Index National Development Plan National Income Dynamics Study National minimum wage Old Age Grant Quarterly Labour Force Survey Recentered Influence Functions South African Multidimensional Poverty Index South Africa Social Security Agency Sectoral Determination (of wages) Small, micro, and medium enterprises Statistics South Africa Temporary employment services Upper bound poverty line United Nations Development Programme World Development Indicators

iv Overcoming Poverty and Inequality in South Africa

CONTENTS

Contents

iv

i. Access to basic services and utilities

20

Figures Tables Boxes Foreword Preface Acknowledgements

v

ii. Housing conditions, access to education,

22

ix

health, and assets

ix

iii. Food security and malnutrition

24

x

iv. The South African Multidimensional Poverty

28

Index

xii

v. Changes in multidimensional poverty at the

29

xiii

national level

Executive Summary

xiv

vi. Multidimensional Poverty Index, headcount

31

CHAPTER 1: INTRODUCTION

1

and intensity: spatial variation

CHAPTER 2: EVOLUTION, DIMENSIONS AND

6

vii. Multidimensional deprivation

33

DYNAMICS OF POVERTY IN SOUTH AFRICA

E. Economic mobility: transitioning from chronic 33

A. Despite progress in reducing poverty since

7

poverty to middle class

1994, poverty rates remain high for an upper middle-income country

i. Poverty transitions, chronic poverty, and

34

characteristics

i. Trends in national poverty

7

ii. The scope of social classes in South Africa

35

ii. International poverty trends B. Who are the poor? C. Where do the poor live?

i. Variation in poverty across provinces ii. Variation in poverty across municipalities

11

iii. The profile of social classes and factors

36

13

associated with escaping chronic poverty

16

CHAPTER 3: SOUTH AFRICA IS ONE OF THE

42

MOST UNEQUAL COUNTRIES IN THE WORLD

16

A. Consumption inequality is very high and has

43

17

increased since the end of apartheid

D. Notable progress has been made in reducing

20

B. High level of inequality of opportunity

45

multidimensional poverty since the end of

apartheid in 1994

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