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Stellenbosch Working Paper Series No. WP05.2015

Publication date: 2015

The aim of this study is to use data from three waves of the National Income Dynamics Study (2008, 2010 and 2012) in order to examine and decompose the dynamics of child poverty over the period. The study is specifically aimed at examining the poverty dynamics of children, as they have been shown to one of the more vulnerable groups in South Africa. We use the framework of an asset poverty line first developed by Carter and May (2001) in order to identify those children in households that are in structural poverty with an asset base which is too low to escape poverty in the long run. We find that almost 40% of the children in our sample found themselves in this structural poverty trap between 2008 and 2012. As expected, these children have suffered as a result of this deprivation, even in comparison to their peers who have also been chronically poor over the period, but were living in households with access to more assets. We conduct some preliminary investigations into the potential causes of welfare changes over time. In line with previous work on the topic, we identify low initial levels of education, low asset-holdings, low initial employment and adverse household formation as possible causes of these poverty traps. Finally, we also conduct some robustness checks of the income changes by correcting for measurement error using an instrumental variables approach.

JEL Classification:
I32, D63, J13

Poverty measurement, poverty dynamics, children, South Africa, National Income Dynamics Study