Challenging inequalities through policy relevant academic research.


April 2021

Dear Friends,

This past month we had the traumatic experience of watching an uncontrolled fire blaze across the mountain and burn through parts of our campus, including one of our famous libraries. While some of the losses are irreplaceable, the University of Cape Town as a community did extremely well under the circumstances. There was no loss of life, and thousands of students were re-housed and catered for at the drop of a hat. The School of Economics building, in which SALDRU is housed, was largely unaffected, although we will continue to work from home for now due to the COVID-19 pandemic.

Our lead article this month relates to an event hosted by the AFD, the French development agency. The AFD have been generous supporters of the African Centre of Excellence for Inequality Research (ACEIR) since its inception. ACEIR is a multi-country research network that is headquartered in SALDRU, and includes partners in Ghana and Kenya. The event coincided with the ending of a much larger AFD project on inequality, and both Murray Leibbrandt and Vimal Ranchhod were amongst the presenters.

On the research front, we list two new working papers in the SALDRU Working Paper series, on the Unemployment Insurance Fund (UIF) and categorical inequalities in South Africa respectively. We are also very pleased to announce the publication of Inequality in the Developing World, an open access book co-edited by Murray Leibbrandt, together with Carlos Gradin and Finn Tarp from UNU-WIDER. The book contains reviews from several developing countries, and Saldrupians contributed a number of input papers to the volume.

Best wishes,

Murray Leibbrandt
Director, SALDRU
Vimal Ranchhod
Deputy Director, SALDRU

South African inequalities highlighted at international conference

Image: Screenshots of Prof. Vimal Ranchhod and Prof. Murray Leibbrandt speaking at the conference. Images: ACEIR.

Findings from South Africa’s first multidimensional inequality diagnostics report recently featured prominently at a high-level conference hosted by the European Union (EU) and the Agence Française de Développement (AFD). The Inequality Trends in South Africa report, a SALDRU-led collaboration with Statistics South Africa, was the first in a series of inequality country reports published under the banner of the African Centre of Excellence for Inequality Research (ACEIR). Highlights from the report were presented by SALDRU’s Prof. Vimal Ranchhod, alongside similar presentations from Ghana and Kenya, at the final conference of the EU-AFD Research Facility on Inequalities. The event was hosted to share results of the Research Facility’s studies since 2018 and draw conclusions and make recommendations for public policy. Read more.


Reinstating the importance of categorical inequities in South Africa

South Africa was one of the most unequal countries in the world in 1994 and inequality has featured prominently as a key socio-economic and policy challenge over the post-apartheid period. Yet, despite policy interventions with the aim of reducing inequality, these high levels of inequality remain. Such resilience in inequality demands from us a better understanding of the mechanisms that reproduce and create inequalities. Having consolidated the research on South Africa’s income and wealth inequality, the authors explore the interactions between these inequalities and different sets of categories (gender, race and class) in space, to surface how the dynamics of inequality relate to mechanisms that create and reproduce inequalities in South Africa. They build this analysis further by taking stock of recent work on social mobility. In the conclusion this picture of precarious mobility is pulled together and policies to overcome inequality against this prevailing reality are reviewed. Access here.

Citation:  Leibbrandt, M., Diaz Pabón, F. (2021). Reinstating the importance of categorical inequities in South Africa. Cape Town: SALDRU, UCT. (SALDRU Working Paper Number 275).

South Africa’s Unemployment Insurance Fund Benefit Function: A Mathematical Critique

This paper highlights the unnecessary complexity of South Africa’s Unemployment Insurance Fund (UIF) benefit function, known as the Income Replacement Rate (IRR), and the disadvantageous manner in which the IRR is low for most earners. Possible alternative formulae are described, along with the implications for total expenditure on the UIF. The paper recommends simpler (and more optimal) formulae. Access here.

Citation:  Horn, AJ. (2021). South Africa’s Unemployment Insurance Fund Benefit Function: A Mathematical Critique. Cape Town: SALDRU, UCT. (SALDRU Working Paper Number 276).

For more SALDRU working papers, journal article contributions and policy briefs, please visit OpenSALDRU.


Inequality in the Developing World

Image: Mikolaj on Unsplash.

A full open access book Inequality in the Developing World, edited by Murray Leibbrandt with Carlos Gradin and Finn Tarp from UNU-WIDER, was published on 24 March 2021 by Oxford University Press. The book contains assessments of the measurement and analysis of global inequality by leading inequality scholars, aligning these to comprehensive reviews of inequality trends in five of the world’s largest developing countries — Brazil, China, India, Mexico, South Africa. The country chapters drew on a set of papers from each country that were produced as part of the large international project Inequality in the Giants, led by UNU-WIDER in partnership with a number of international inequality scholars including Murray Leibbrandt. Five input papers were produced by SALDRU researchers on South Africa. Read more.

Vice-Chancellor’s Open Lecture: Abhijit Banerjee at UCT

Image: University of Cape Town (UCT).

On the evening of 29 April (SAST), J-PAL Co-Founder Abhijit Banerjee of Massachusetts Institute of Technology (MIT) will be speaking at UCT's virtual Vice-Chancellor’s Open Lecture about his book Good Economics for Hard Times, co-authored with Esther Duflo (MIT; Co-Founder, J-PAL). He will discuss how economics can be harnessed for the common good to tackle today's global challenges. Learn more and register here.

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