Measurement and data

Are we measuring poverty and inequality correctly? Comparing earnings using tax and survey data

Martin Wittenberg, University of Cape Town on 3 October 2017
Reads 789

Calculating the earnings Gini coefficient with survey data from the Quarterly Labour Force Survey (QLFS) may lead to an underestimation of inequality. When one compares earnings in the tax assessments data to those in the QLFS, it appears that the earnings of employees in the QLFS are underreported. Benefits and annual bonuses contribute substantially to the gap. In the case of self-employment incomes, the top earnings in the QLFS are also underreported, but the tax data seems to miss many mid- and low-income earners.

How accurate is our migration data?

Susan Ziehl, Cape Town on 7 June 2016
Reads 2,676

The reliability of Census data on demography and migration comes under attack periodically. This article sheds light on the reliability of survey results with respect to migration into the Western Cape. Census data and two independent studies are compared and the convergence or divergence of the findings assessed. There is greater consistency for more aggregate-level measures than for disaggregated measures (whether by geographical unit or by race). Such comparisons of surveys are important for gauging the reliability of our knowledge of migration.

How inclusive is economic growth in South Africa?

Frederick C.v.N Fourie, University of the Free State on 9 September 2014
Reads 9,089

While everybody seems to favour the pursuit of inclusive growth, this concept is rarely clearly defined in the policy debate. Inclusive growth is often confused or conflated with pro-poor growth or broad-based growth. A recent definition from researchers at the UNDP integrates the latter two concepts to include employment, poverty and inequality. A derivative Inclusiveness Index shows that South Africa has a very low degree of inclusiveness compared to other developing countries and that its growth since 1996 has not been inclusive.

Poverty may have declined, but deprivation and poverty are still worst in the former homelands

Michael Noble, Southern African Social Policy Research Institute on 27 May 2014
Reads 8,174

Former homeland areas continue to have significantly higher levels of deprivation and poverty than the rest of South Africa. Of all the former homeland areas, the erstwhile Transkei in the Eastern Cape has the highest levels of deprivation (measured using the Index of Multiple Deprivation for 2011) as well as income poverty. Indeed, the deprivation gap between former homelands and the rest of South Africa has not declined in the period 2001 to 2011.

Poverty may have declined, but women and female-headed households still suffer most

Michael Rogan, Rhodes University on 6 May 2014
Reads 19,072

Amidst a decline in general poverty rates since 2000, women and people living in female-headed households still are significantly worse off. Women are up to 30% poorer than men on average. There is an even larger poverty gap between female- and male-headed households – a difference of as much as 100%, despite improved education, health and basic services. Better health, water and sanitation services, especially in rural areas, should narrow these gaps significantly.

How do the non-searching unemployed feel about their situation? On the definition of unemployment

Neil Lloyd, University of Cape Town on 25 June 2013
Reads 10,509

New evidence suggests that non-searching unemployed people are significantly less satisfied with their lives than people who are not economically active. Indeed, the non-searching unemployed have hit rock bottom. Assuming that people do not freely choose an unsatisfactory state of living, a case is made that the non-searching unemployed – or ‘discouraged workers’ – are involuntarily unemployed and should be included in the definition and measurement of the labour force. Consequently, a case is made for the adoption of the broad measure of unemployment.

How high is graduate unemployment in South Africa? A much-needed update

Hendrik van Broekhuizen, Department of Economics, Stellenbosch University on 12 May 2013
Reads 53,693

The frequently reported ‘crisis in graduate unemployment’ in South Africa is a fallacy based on questionable research. Not only is graduate unemployment low at less than 6%, but it also compares well with rates in developed countries. The large expansion of black graduate numbers has not significantly exacerbated unemployment amongst graduates. Contrary to popular perception, such graduates – many from ‘formerly disadvantaged’ universities – have been snapped up by the private sector. Black graduates are, however, still more likely to be unemployed than white graduates.

The unemployed in South Africa: Why are so many not counted?

Dorrit Posel, University of KwaZulu-Natal on 26 February 2013
Reads 30,742

The official rate of unemployment includes only the unemployed who are actively searching for work. However, findings from new data challenge this practice. The ‘searching unemployed’ are no more likely to find employment than the ‘non-searching unemployed’. This casts doubt on the idea that non-searchers are not committed to finding work. Furthermore, many people find jobs through social networks – but this job-finding strategy is not adequately recognised as ‘searching for work’ in official statistical surveys. StatsSA should reconsider how they count the ‘officially’ unemployed.

The original criticisms of the Adcorp Employment Index (February 2012)

Andrew Kerr, University of Cape Town on 20 February 2013
Reads 6,541

Adcorp’s estimated unemployment rate is so low that it disposes of the unemployment crisis. But Adcorp uses a crude currency-demand method to estimate the size of the unrecorded economy, despite researchers’ strong criticism of this method. To estimate informal sector employment, Adcorp mixes up definitions of informal employment and the unrecorded economy and guesses at the labour intensity of the unrecorded economy. They also guess at the number of illegal immigrants. Moreover, Adcorp’s estimates have no statistical precision. Its figures are neither reliable nor credible.

Adcorp’s employment and unemployment figures are not taken seriously by researchers – yet they can do much harm

Servaas van der Berg, Stellenbosch University on 12 February 2013
Reads 75,317

Adcorp’s unemployment figures are derived from weak research and is repeated too often by gullible journalists. Based on a flawed methodology and dubious assumptions, the Adcorp figures imply that only about a million people are unemployed and that the total unemployment rate is 5%. At the same time, Adcorp has published an inflated figure for graduate unemployment (600 000) – a grave inconsistency. Whilst serious researchers will not touch Adcorp data, it can harm decision-making by policymakers and potential university students and their parents.