Poverty and livelihoods

Socio-economic class in South Africa: playing snakes and ladders with loaded dice

Simone Schotte, UNU-WIDER on 8 August 2019
Reads 1,974

Experiences of poverty over time differ markedly. Out of four South Africans, two experience persistent poverty with few future prospects. Another one moves in and out of poverty, constantly struggling to make ends meet. Only one out of four is stably middle class or elite. The unequal risk of falling into poverty is related to characteristics such as race, education and geographic location. Being employed and the type of employment are key determinants of vulnerability to poverty.

Creating jobs, reducing poverty V: Is ‘formalising’ the informal sector the answer?

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 21 August 2018
Reads 4,407

This extract from a new REDI3x3 book proposes a constructive way to approach the possible ‘formalisation’ of the informal sector. A common impulse is to reduce formalisation to regulating and taxing informal enterprises – two blunt instruments that can be destructive. Formalisation must rather be seen as a means to aid the quest for better livelihoods for more people and stronger, more self-standing informal enterprises. Smart formalisation can be pursued with a ‘formalisation menu’.

Creating jobs, reducing poverty II: The substantial employment performance of the informal sector

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 31 July 2018
Reads 7,846

In this extract from a new REDI3x3 book, the employment-creating behaviour of informal enterprises is analysed – in particular, enterprises with employees. Almost half of those working in the informal sector work in such multi-person firms – which provide paid work to about 850 000 people (owner-operators plus paid employees). There is a growing employment orientation and employment intensity. Jobs are created via new-firm entry as well as employment expansion – also by one-person enterprises. Entrant firms are vulnerable, though.

Creating jobs, reducing poverty I: Why the informal sector should be taken seriously and enabled properly

Frederick Fourie, REDI3x3, based at SALDRU, University of Cape Town on 23 July 2018
Reads 101,151

In the first extract from a new REDI3x3 book on the role of the informal sector in job creation and poverty reduction, a compact picture of the size, texture and impact of the sector is provided. One in every six South Africans who work, work in the informal sector. Several policy-relevant features are highlighted, such as industry, spatial and gender dimensions. This provides the backdrop for the second extract on the employment-creating performance of the informal sector.

Does moving to a city mean a better life? New evidence

Ivan Turok, Human Sciences Research Council on 16 April 2018
Reads 10,548

Moving to a city in search of work seems to pay off for many poor people in the countryside. Data that track changes over time indicate that as many as 385 000 people were lifted from poverty between 2008 and 2014 after moving from rural to urban areas – their poverty levels were halved together with a fall in unemployment. Government ambivalence about urbanisation should be replaced by a more positive and pro-active approach.

Meeting food security needs in very poor households in the Eastern Cape: the role of own agricultural production

Michael Rogan, Rhodes University on 6 February 2018
Reads 3,844

Small-scale agriculture evokes strong views in terms of both its current and potential roles in rural development. We examine how many (or few) Black households in rural areas that are identified as ‘food poor’ in terms of their income levels are able to meet their basic food needs – and the role of household agricultural production. We find that although rural households engaged in some form of farming are more likely to be very poor in terms of their incomes, they actually experience hunger less frequently than non-farming households.

Poor land governance stifles rural development and has knock-on effects in urban areas

Pippa Green, REDI3x3 on 23 November 2017
Reads 3,747

Several researchers in the REDI3x3 project focused on poverty in rural areas in the Eastern Cape, which contains two former apartheid homelands, the Ciskei and the Transkei. This article analyses the main messages of this research, highlighting the negative impact of poor land governance and uncertainty of tenure; knock-on effects are apparent in areas like Hout Bay and Marikana. [An edited version of this article appeared in Business Day on 10 November 2017. See references.]

The former Transkei and Ciskei homelands are still poor, but is there an emerging dynamism?

Michael Aliber, Department of Agricultural Economics and Extension, University of Fort Hare on 2 August 2017
Reads 5,963

The dominant perspective on the economic situation of the former homelands is that long-term, deliberate neglect has left a durable legacy of poverty and stagnation. While this may be largely correct, there is also evidence to suggest that the former homelands are dynamic. This article presents some evidence on population, employment and unemployment, in particular through a focus on the evolving nature of the linkages between former homeland towns and their rural environs.

The Transkei Wild Coast: still waiting for something to happen

Mike Coleman, East London on 11 July 2017
Reads 6,458

The Wild Coast, in the former Transkei Bantustan, is characterised by natural beauty and great poverty. Since 1994 rural land administration has collapsed, land tenure has not been reformed, a succession of coastal development plans have been proposed but not implemented – and communities have become disillusioned. The few tourist-related developments that have taken root have done so despite the general collapse of rural governance and are due largely to the determination of local developers and their community partners

A job in the informal sector reduces poverty about as much as a job in the formal sector

Paul Cichello, Boston College on 30 May 2017
Reads 51,433

In the aggregate, earnings from jobs in the informal sector play a small role in reducing national poverty rates, especially because there are relatively few informal-sector jobs. However, if we compare on a per-job basis, the poverty reduction associated with one informal-sector job is generally between 50 to 100% of the poverty reduction associated with one formal-sector job. Growth in the number of jobs in the informal sector would be a sensible component of any plan to reduce poverty.