The DPRU is currently engaged in a variety of interesting and diverse projects and studies. Our research programme has recently been able to enter new terrain, principally through the availability of unique or new datasets. Be it the data on recipients of unemployment insurance, or dispute resolution, or even strikes, these novel datasets have opened up an entirely new and rich set of economic and econometric questions, which were not previously possible.
Towards Resilient Futures Community of Practice: Developing a Fibre Micro-industry to Generate Economic Growth from Degraded Land
Building Economic Complexity in Africa: Laying the Foundation for Expanding Economic Opportunities for Women and Youth in Africa
Ongoing work here is principally structured around a recent grant received to undertake a two-year research project on the pursuit of Structural Change in Africa. The work is globally innovative in that we will use the new tools of economic complexity and product space analysis, to provide concrete policy options that enable African economies move from low productivity to high productivity-high growth sectors in a bid to generate broad-based employment opportunities. The project will have two core objectives. Firstly, to measure the degree and extent of economic complexity and hence the level of economic development in a set of key African economies in the region. Secondly, based on a sample of African countries and through the use of firm surveys, to undertake a detailed product space analysis of each economy. This analysis will map country product spaces and will try to carefully link these to nearby product opportunities, focused on an expansion in growth opportunities, into those products where the economic returns for young people and women are maximised.Read more
The Rise of the ‘Missing Middle’ in an Emerging Economy: the Case of South Africa
Empirical evidence indicates that the South African labour market has been characterized by a U-shaped earnings growth pattern over the post-apartheid period. The bottom and top percentiles of the wage distribution have experienced higher wage growth relative to those in the middle. This pattern, or ‘missing middle’, is similar to what has been termed ‘wage polarization’ in the developed world. Research on the topic of wage polarization, however, has focused almost exclusively on industrialised countries making this work a contribution towards the characterization of wage polarization in an emerging economy. Further to this, we may expect the manifestation of and processes behind wage polarization to differ in emerging compared to industrialised economies because of key differences in their labour markets. In the literature on wage inequality in developed economies, the impact of technology on tasks and the occupational demand for labour plays a key role in explaining variation in wage growth along the distribution. We investigate the relevance of this framework for South Africa along with three other competing and complementary explanations for a U-shaped earnings growth pattern. These include broad-based change in sectoral composition, such as the decline of manufacturing and the emerging dominance of services; skills-biased job growth in a context of high inequality in schooling quality; and, the role of labour market institutions, such as minimum wages, unions and public sector employment. We investigate the relative importance of each of these factors using a Recentered Influence Function regression on a harmonised series of South African labour force datasets merged with the Occupational Information Network (O*NET) for 2000 to 2015. Different explanations prove more or less pertinent at different portions of the distribution. Minimum wages have been key to shoring up wage growth at the bottom of the distribution. Workers in the middle of the distribution have suffered from an oversupply of similarly educated entrants, as well as, the decline of manufacturing and negative returns to the routine type work carried out by the typical worker in this portion of the distribution. Strong growth at the top end has been reinforced by skills-biased developments in all four frameworks.
Outputs: Papers and journal articles due 2019
Property Crime and Inequality: the Case of South Africa
It is well established in the literature that property crime rates increase with increasing levels of inequality. However, most research in this area comes from contexts of low-to-moderate crime and inequality rates. This paper explores whether this relationship holds in a context of extreme levels of crime and inequality, using South Africa as a case study. We use cross-sectional precinct-level property crime rates from 2011 combined with census data. We perform non-parametric, semi-parametric, and parametric analyses to uncover the nature of the property crime-inequality relationship and find strong evidence of a positive linear relationship between property crime and an interaction term of income with inequality, but strong evidence of a negative relationship between property crime and inequality on its own. This result is robust to various measures of inequality. One explanation for this finding could be that inequality acts as a signal to relatively richer residents in an area (local elites) that they are more at risk of falling victim to crime. As a consequence of this mechanism, local elites start investing in protective measures which could dampen crime rates.
Outputs: This research is to be presented at the 2019 Jobs & Development Conference in Washington D.C. A working paper is due to be published later in 2019.