In this paper we study and analyse household income mobility dynamics among Africans in South Africa's most populous province between 1993 and 1998. Compared to industrialized and most developing countries, mobility has been quite high, as one would have expected after the transition in South Africa. This finding is also robust to various ways to control for measurement error. When disaggregating the sources of mobility, we find that demographic changes and employment changes account for a most of the mobility observed which is related to rapidly shifting household boundaries and a very volatile labour market in an environment of high unemployment. In a multivariate analysis, we see that transitory incomes play a large role. We also find three types of poverty traps, associated with large initial household size, poor initial education, and poor initial employment access.
Income Mobility and Household Dynamics in South Africa, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 38 pp.