nep-afr New Economics Papers
on Africa
Issue of 2013‒09‒13
twenty-two papers chosen by
Quentin Wodon
World Bank

  1. The impact of chinese import penetration on the south african manufacturing sector By Lawrence Edwards; Rhys Jenkins
  2. Progress through school and the determinants of school dropout in South Africa By Nicola Branson; Clare Hofmeyr; David Lam
  3. Distance as a barrier to health care access in South Africa By Zoë McLaren; Cally Ardington; Murray Leibbrandt
  4. Trends in teenage childbearing and schooling outcomes for children born to teens in South Africa By Nicola Branson; Cally Ardington; Murray Leibbrandt
  5. Moving out and moving in: Evidence of short-term household change in South Africa from the National Income Dynamics Study By Lloyd Grieger; April Williamson; Murray Leibbrandt; James Levinsohn
  6. Braving the waves: the role of time and risk preferences in illegal migration from Senegal By Jean-Louis Arcand; Linguère Mously MBAYE
  8. New Evidence on Subjective Wellbeing and the Definition of Unemployment in South Africa By Neil Lloyd; Murray Leibbrandt
  9. An evaluation of the determinants and implications of panel attrition in the National Income Dynamics Survey (2008 – 2010) By Nic Baigrie; Katherine Eyal
  10. What happened to multidimensional poverty in South Africa between 1993 and 2010? By Arden Finn; Murray Leibbrandt; Ingrid Woolard
  11. Sampling methodology and field work changes in the october household surveys and labour force surveys By Andrew Kerr; Martin Wittenberg
  12. Social protection and labour market outcomes of youth in South Africa By Cally Ardington; Till Bärnighausen; Anne Case; Alicia Menendez
  13. Changes in education, employment and earnings in South Africa – A cohort analysis By Nicola Branson; Cally Ardington; David Lam; Murray Leibbrandt
  14. The Role of Tertiary Education Institutions in Teaching Entrepreneurship in Post- Conflict Environments By Johan Venter
  15. Are we there yet? Improving solar PV economics and power planning in developing countries: The case of Kenya By Janosch Ondraczek
  16. Optimum fisheries management under climate variability: Evidence from artisanal marine fishing in Ghana By Akpalu, Wisdom; Dasmani , Isaac; Normanyo, Ametefee K.
  17. Advancing small area estimation By Arndt, Channing; Hussain, M. Azhar; Salvucci, Vincenzo; Tarp, Finn; Osterdal, Lars
  18. The use of random geographic cluster sampling to survey pastoralists By Himelein, Kristen; Eckman, Stephanie; Murray, Siobhan
  19. Donor coordination for effective government policies? Implementation of the new aid effectiveness agenda in health and education in Zambia By Leiderer, Stefan
  20. Communicating with Farmers through Social Networks By Ariel BenYishay; A. Mushfiq Mobarak
  21. Livestock asset transfers with and without training: evidence from Rwanda By Jonathan Argent; Britta Augsburg; Imran Rasul
  22. Capacity Development in Higher Education: New Public Universities in Ethiopia By Rita van Deuren; Tsagazeab Kahsu; Seid Mohamed Ali; Wondimu Woldie

  1. By: Lawrence Edwards (School of Economics, University of Cape Town); Rhys Jenkins (School of International Development, University of East Anglia)
    Abstract: The rapid growth in imports from China over the past decade is seen as a key factor contributing towards the relatively slow growth in output and the decline in employment in South African manufacturing during this period. Yet the effects of Chinese trade may be complex and differentiated across sectors. To account for these differential effects, this analysis draws on a database of 44 manufacturing industries covering the period 1992-2010. Two approaches – a Chenery-type decomposition and econometric estimation – are used to evaluate the impact of Chinese trade on prices, production and employment in South African manufacturing. Chinese penetration of the South African market is shown to have increased rapidly over the past decade, in part due to displacement of imports from other countries, but more importantly at the expense of local production. Exports of manufactures to China did not add significantly to industrial growth in South Africa, whereas labour-intensive industries were particularly badly affected by Chinese imports implying that the negative impact on employment was more than proportional to the output displacement. However, we also find evidence that Chinese imports contributed towards lower producer price inflation in South Africa, which in turn will have moderated increases in consumer prices and helped to curtail production cost increases.
    Date: 2013
  2. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Clare Hofmeyr; David Lam (University of Michigan)
    Abstract: The release of the National Income Dynamics Study Wave 2 provides the first nationally representative longitudinal data collected in South Africa. This makes it possible to study transitions in and out of school, across grades and into work in ways not previously possible. We illustrate the high levels of grade repetition evident in South African schools and show how school completion presents a significant hurdle with very few youth successfully completing matric. Exit from school does not offer any advantages as most youth find themselves idle once they have left school. Our regression analysis investigates correlates of school dropout and shows that not keeping pace is a key determinant of school dropout, even after controlling for school quality and socioeconomic status. Those behind but attending higher quality schools are partially protected from dropping out. Some evidence that credit constraints may be related to dropout is found, especially among males.
    Keywords: education, dropout, school completion, credit constraints in educational attainment
    JEL: I24 I20
    Date: 2013
  3. By: Zoë McLaren (Department of Health Management and Policy, School of Public Health, University of Michigan); Cally Ardington (SALDRU, School of Economics, University of Cape Town); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Access to health care is a particular concern given the centrality of poor access in perpetuating poverty and inequality. South Africa's apartheid history leaves large racial disparities in access despite post-apartheid health policy to increase the number of health facilities, even in remote rural areas. However, even when health services are provided free of charge, monetary and time costs of travel to a local clinic may pose a significant barrier for vulnerable segments of the population, leading to overall poorer health. Using new data from the first nationally representative panel survey in South Africa together with administrative geographic data from the Department of Health, we investigate the role of distance to the nearest facility on patterns of health care utilization. We find that many apartheid legacies remain in place. Ninety percent of South Africans live within 7km of the nearest public clinic, and two-thirds live less than 2km away. However, 15% of Black African adults live more than 5km from the nearest facility, in contrast to only 7% of coloureds and 4% of whites. There is a clear income gradient in proximity to public clinics. Also, we find distance decay in the uptake of important health services such as having a skilled birth attendant, an immunization record and a growth chart for children. The poorest tend to reside furthest from the nearest clinic and an inability to bear travel costs constrains them to lower quality health care facilities. Within this general picture, men and women have different patterns of health care utilization, with the reduction in utilization of health care associated with distance being larger for men than it is for women. Much has been done to redress disparities in South Africa since the end of apartheid but progress is still needed to achieve equity in health care access.
    Keywords: Health care access, inequality, South Africa
    Date: 2013
  4. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Teenage childbearing is considered a social problem with costs to the teenage mother, her child and society at large. In South Africa, media attention suggests a contemporary crisis in teen childbearing; often linking this to a fear that the Child Support Grant incentivises motherhood among teens. Despite these assertions, there is little empirical research assessing the trends in teen childbearing over time in South Africa and the intergenerational consequences of teenage childbearing. This paper uses six nationally representative household surveys to show that, while teenage childbearing decreased between 1980 and 2008, it is not an uncommon event in South Africa. Around 25% of women gave birth before age 20 in 2008. Children born to teen mothers are found to have worse educational outcomes, with children of young teen mothers most at risk. Differences are found between population groups, with the association largest and increasing over time for coloureds and relatively small and stable for Africans. About half the association can be explained by relative levels of poverty and maternal education.
    Keywords: Teenage childbearing, South Africa, National household survey data
    JEL: I24 J13
    Date: 2013
  5. By: Lloyd Grieger (Center for Research on Inequalities and the Life Course, Jackson Institute for Global Affairs, Yale University); April Williamson (Jackson Institute for Global Affairs, Yale University); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town); James Levinsohn (Yale School of Management, Jackson Institute for Global Aff airs, Yale University)
    Abstract: We use longitudinal data from the National Income Dynamics Study (NIDS) to document the extent of recent short-term residential and household compositional change in South Africa. We analyze the demographic correlates of these transitions, including population group, age, urban/rural status, and income. We examine educational and labour market transitions among movers and the prevalence of the four major types of compositional change – births, addition of joiners, deaths, and loss of leavers. We find that short-term household change is prevalent in South Africa. During a 2-year period from 2008 to 2010, 10.5% of South Africans moved residence and 61.3% experienced change in household composition. We find that moving is more common among blacks and whites, very young children, young adults, urban individuals, and those with higher incomes. Among non-movers, compositional change is more likely for blacks and coloureds, young adults and children, females, urban individuals, and individuals with lower incomes.
    Keywords: household change; residential dynamics; moving; National Income Dynamics Study
    Date: 2013
    Abstract: This paper aims to provide the first evidence concerning the relationship between time and risk preferences and illegal migration in an African context. Based upon our theoretical model and using a unique data set on potential migrants collected in urban Senegal, we evaluate a measure of time and risk preferences through the individual's intertemporal discount rate and coefficient of absolute risk aversion. Remarkably, our results show that these individual preferences matter in the willingness to migrate illegally and to pay a smuggler.
    Keywords: Illegal migration; Discount rate; Risk aversion; Africa; Senegal
    Date: 2013–08–30
  7. By: Shimada, Go
    Abstract: Industrialization is the key for sustainable economic growth in Africa. The role of industrial policy has been discussed intensively recently. This paper sheds light on the learning (or learning how to learn) aspect of industrialization policy, proposing a comprehensive approach. A great deal of past literature focuses only on the technological aspects of learning, but industrialization is a multi-faceted task, covering policy planning, policy implementation, and managerial knowledge. This paper took up a case from Ethiopia. The case study confirmed that learning on managerial knowledge improved performance of private firms. It also confirmed that policy learning expanded the policy scope of the government to help private sector development. These two aspects are inseparable, and this comprehensive approach should be used by donor countries for the industrialization of Africa.
    Keywords: industrialization policy, Ethiopia, private firms
    Date: 2013–07–18
  8. By: Neil Lloyd (SALDRU, University of Cape Town, South Africa); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Access to new nationally-representative, individual-level panel data from South Africa has allowed for the revalidation of Kingdon and Knight's (2006) discussion on the definition of unemployment. This paper investigates subjective wellbeing as a measure of comparison between labour market statuses. It finds that on the grounds of subjective wellbeing the non-searching unemployed (or 'discouraged') are significantly worse-off than the not-economically-active. Moreover, evidence suggests that with regard to the relationship between life satisfaction and labour market status, the 'discouraged' have 'hit rock bottom'. This paper therefore advocates for the inclusion of the non-searching unemployed in the labour force and the use of a broad definition of unemployment, on the grounds that rational individuals would not self select into a lower state of wellbeing.
    Date: 2013
  9. By: Nic Baigrie (School of Economics, University of Cape Town); Katherine Eyal (SALDRU, School of Economics, University of Cape Town)
    Abstract: Panel surveys offer a valuable tool for researchers to explore the dynamics underlying individual and household behaviours. The Achilles heel of panel data is attrition. This paper examines the determinants and implications of attrition in the first two waves of South Africa's National Income Dynamics Survey (NIDS). Multivariate tests in labour market and health specifications show that there is some moderate evidence of attrition bias in estimated coefficients based on the non-attriting sample. This bias can be seen in labour market specifications, in particular for men, and for Africans, and to a much lesser degree in health specifications, in particular for small samples of Whites. Researchers should take care when using the panel data set to generalise to the overall population.
    Keywords: attrition bias, panel surveys, South Africa, selection on observables, selection on unobservable.
    JEL: J10 C23 C24 D00
    Date: 2013
  10. By: Arden Finn (SALDRU, School of Economics, University of Cape Town); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town); Ingrid Woolard (SALDRU, School of Economics, University of Cape Town)
    Abstract: Gauging levels of welfare using data on income and expenditure is informative yet limited and can be enhanced by including non-money-metric measures. Nationally representative data sets from 1993 and 2010-2011 which cover a broad set of domains are used to calculate a multidimensional poverty index (MPI) for each year. This paper calculates these indices and uses them to assess trends in multidimensional poverty in South Africa over the post-apartheid period. From 1993 to 2010 MPI poverty fell by 29 percentage points from 37% to 8%. During this time period, the level of severe MPI poverty also dropped substantially from 17% of the population in 1993 to just over 1% in 2010. Not only did the incidence and intensity of multidimensional poverty fall significantly, but the average distance from the multidimensional poverty line across all dimensions also decreased over the period. These declines in multidimensional poverty are notably stronger than the estimated declines in money-metric poverty, which are also estimated and compared for the post-apartheid period.
    Date: 2013
  11. By: Andrew Kerr (DataFirst, University of Cape Town); Martin Wittenberg (DataFirst, University of Cape Town)
    Abstract: The 1999 October Household Survey was the first time that Statistics South Africa (Stats SA) introduced a master sample of Enumeration Areas (Stats SA, 2000a). There were several important changes in sampling and field worker practice that accompanied the introduction of the master sample of EAs, which have not been systematically documented , and which make comparability of the surveys undertaken before and after this time difficult. We document these changes in this research note and provide evidence that these changes were partly responsible for the odd trends in the total number of single person households estimated from the October Household Surveys (OHSs) and Labour Force Surveys (LFSs), noted in Wittenberg and Collinson (2007) and Pirouz (2005), as well as rapid increases in employment, in the late 1990s.
    Date: 2013
  12. By: Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); Till Bärnighausen (Africa Centre for Health and Population Studies and Harvard School of Public Health); Anne Case (Princeton University); Alicia Menendez (University of Chicago)
    Abstract: An Apartheid-driven spatial mismatch between workers and jobs leads to high job search costs for people living in rural areas of South Africa—costs that many young people cannot pay. In this paper, we examine whether the arrival of a social grant – specifically a generous state old age pension given to men and women above prime age – enhances the ability of young men in rural areas to seek better work opportunities elsewhere. Using 8 waves of socioeconomic data on household living arrangements and members' characteristics and employment status, collected between 2001 and 2011 at a demographic surveillance site in KwaZulu-Natal, we find that young men are significantly more likely to become labor migrants when someone in their household becomes age-eligible for the old-age pension. More specifically, we find that pension gain is a significant force, encouraging migration for work, but only among those who have successfully completed high school (matric). On average, relative to other potential labor migrants, young men with a matric are 8 percentage points more likely to migrate for work when their households become pension eligible. Among young men who were observed as labor migrants, we find that, upon pension loss, it is the youngest men who are the most likely to return to their sending households, perhaps because they are the least likely to be self-sufficient at the point the pension is lost. We present evidence consistent with binding credit constraints limiting young men from poorer households from seeking more lucrative work elsewhere.
    Date: 2013
  13. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); David Lam (; Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Rapid increases in educational attainment and the massification of secondary education in South Africa resulted in substantial differences in the supply and quality of educated workers across generations. This paper describes changes in the distribution of education across birth cohorts and how these relate to changes in the probability of employment, the distribution of earnings and the earnings premiums to complete secondary and tertiary education. Tracking cohorts over time allows us to disentangle generational and life-cycle components of these changes. Younger cohorts are shown to have increasingly faced worse labour market conditions than their predecessors, although this may be changing for cohorts born after 1980. Furthermore, the relative reward to complete secondary and tertiary education has remained positive, and increased for tertiary educated cohorts born since the 1960s. Increases in earnings inequality among those with complete secondary education suggests increased variance in education quality during the period when completed secondary education expanded rapidly.
    Keywords: Educational attainment, Earnings, Employment, South Africa, Cohort analysis
    JEL: I25 I24 J24
    Date: 2013
  14. By: Johan Venter (Maastricht School of Management, Maastricht, The Netherlands)
    Abstract: This paper explores the role of tertiary institutions in teaching entrepreneurship in Post- Conflict Liberia, one of several Post-Conflict Environments (PCEs) in Africa and abroad. The country wracked with years of civil war, and now seemingly on a path of democracy and economic growth rightfully is turning towards entrepreneurship education as a vehicle to job creation, especially among graduates and the unemployed youth. Four institutions of tertiary education in Liberia were earmarked by their educational authorities to play a leading role in delivering effective entrepreneurship education in future. A survey (n=28) was conducted among academics of the institutions in order to ascertain a better understanding of their perceptions on entrepreneurship education, the Liberian Post-Conflict labor market and related issues such differences between sub-Saharan labor markets and the loss of skilled individuals and professionals as a result of emigration (brain drain). Also the extent to which the academics were willing and able to participate in a program of entrepreneurship education. The results in general show enthusiasm for entrepreneurship education. Ideally it would seem that a process of infusing entrepreneurship into all curricula would be ideal. Special care should also be given to accommodating specific demands of the Liberian labor market, especially given their past history of conflict.
    Date: 2013–09
  15. By: Janosch Ondraczek (University of Hamburg, Research Unit Sustainability and Global Change)
    Abstract: Despite the rapid decline in the cost of solar photovoltaic (PV) systems in the past five years, even recent academic research suggests that the cost of generating PV electricity remains too high for PV to make a meaningful contribution to the generation of grid electricity in developing countries. This assessment is reflected in the views of policymakers throughout Africa, who often consider PV as a technology suited only to remote locations and small-scale applications. This paper therefore analyzes whether, in contrast to conventional wisdom, PV is already competitive with other generation technologies. Analytically, the paper is based on a levelized cost of electricity (LCOE) model to calculate the cost of PV electricity in Kenya, which serves as a case study. Based on actual technology costs and Kenya’s solar resource, the LCOE from PV is estimated at USD 0.21/kWh for the year 2011, with scenario results ranging from USD 0.17-0.30/kWh. This suggests that the LCOE of grid-connected PV systems may already be below that of the most expensive conventional power plants, i.e. medium-speed diesel generators and gas turbines, which account for a large share of Kenya’s current power mix. This finding implies that researchers and policymakers may be mistaken in perceiving solar PV as a costly niche technology, rather than a feasible option for the expansion of power generation in developing countries.
    Keywords: solar photovoltaic electricity, on-grid electricity supply, levelized cost of electricity, developing countries, Africa
    JEL: C29 O12 Q42 Q48
    Date: 2013–04–18
  16. By: Akpalu, Wisdom; Dasmani , Isaac; Normanyo, Ametefee K.
    Abstract: In most coastal developing countries, the artisanal fisheries sector is managed as a common pool resource. As a result, such fisheries are overcapitalized and overfished. In Ghana, in addition to anthropogenic factors, there is evidence of rising coastal
    Keywords: climate variability, optimal tax, generalized maximum entropy, Ghana
    Date: 2013
  17. By: Arndt, Channing; Hussain, M. Azhar; Salvucci, Vincenzo; Tarp, Finn; Osterdal, Lars
    Abstract: The poverty mapping methodology for estimating welfare rankings from small areas has proven to be useful in guiding allocation of government funds, regional planning, and general policy formulation. Nevertheless, poverty mapping also suffers from a series
    Keywords: small area estimation, welfare, poverty mapping, multidimensional poverty measurement, first order dominance, Mozambique
    Date: 2013
  18. By: Himelein, Kristen; Eckman, Stephanie; Murray, Siobhan
    Abstract: Livestock are an important component of rural livelihoods in developing countries, but data about this source of income and wealth are difficult to collect because of the nomadic and semi-nomadic nature of many pastoralist populations. Most household surveys exclude those without permanent dwellings, leading to undercoverage. This study explores the use of a random geographic cluster sample as an alternative to the household-based sample. In this design, points are randomly selected and all eligible respondents found inside circles drawn around the selected points are interviewed. This approach should eliminate undercoverage of mobile populations. The results of a random geographic cluster sample survey are presented with a total sample size of 784 households to measure livestock ownership in the Afar region of Ethiopia in 2012. The paper explores the data quality of the random geographic cluster sample relative to a recent household survey and discusses the implementation challenges.
    Keywords: Livestock and Animal Husbandry,Rural Development Knowledge&Information Systems,Scientific Research&Science Parks,Wildlife Resources,Science Education
    Date: 2013–09–01
  19. By: Leiderer, Stefan
    Abstract: There is a growing interest in the debate on aid effectiveness for assessing the impact of aid not only on economic growth and poverty reduction, but also on intermediate outcomes such as health and education. This paper reviews evidence from recent in-de
    Keywords: aid effectiveness, health, education, coordination, political economy
    Date: 2013
  20. By: Ariel BenYishay (University of New South Wales); A. Mushfiq Mobarak (Economic Growth Center, Yale University)
    Abstract: Low adoption of productive agricultural technologies is a puzzle. Agricultural extension services rely on external agents to communicate with farmers, although social networks are known to be the most credible source of information about new technologies. We conduct a large-scale field experiment on communication strategies in which extension workers are partnered with different members of social networks. We show that communicator actions and effort are susceptible to small performance incentives, and adoption rates vary by communicator type. Communicators who face conditions most comparable to target farmers are the most persuasive. Incorporating communication dynamics can enrich the literature on social learning.
    Keywords: social learning, agriculture, technology adoption, Malawi
    JEL: O33 O13 Q16
    Date: 2013–08
  21. By: Jonathan Argent; Britta Augsburg (Institute for Fiscal Studies); Imran Rasul (Institute for Fiscal Studies and University College London and IFS)
    Abstract: This paper presents evidence from Rwanda's Girinka ('One Cow per Poor Family') program that has distributed more than 130,000 livestock asset transfers in the form of cows to the rural poor since 2006. Supply side constraints on the programe results in some beneficiaries receiving complementary training with the cow transfer, and other households not receiving such training with their cow. We exploit these constraints to estimate the additional impact of receiving complementary training with the cow transfer, on household's economic outcomes up to six years after having receieved the livestock asset transfer. Our results show that even in a setting such as rural Rwanda where linkages between farmers and produce markets remain weak, the provision of training with asset transfers has permanent and economically significant impacts on milk production, milk yields from livestock, household earnings, and asset accumulation. The results have important implications for the current generation of 'ultra-poor' livestock asset transfer programes being trialled globally as a means to allow the rural poor to better their economic lives.
    Keywords: Livestock Asset Transfer, Training, Ultra-poor
    JEL: O13 Q12
    Date: 2013–08
  22. By: Rita van Deuren (Maastricht School of Management, The Netherlands); Tsagazeab Kahsu (Aksum University, Ethiopia); Seid Mohamed Ali (Jigjiga University, Ethiopia); Wondimu Woldie (Wolaita Sodo University, Ethipia)
    Abstract: Higher education in developing countries faces tremendous challenges. Universities are expected to contribute to social and economic development by delivering quality higher education to a fast growing number of students. This requires both quantitative and qualitative capacity development of the higher education sector in developing countries to increase enrollment rates and improve quality of educational programs and graduates. Different roadmaps exist in different countries. This paper focuses on the Ethiopian situation and aims at describing how the Ethiopian higher education system was able to realize growth and what its future ambitions are. Also, characteristics and challenges of the higher education system are included. At the university level, specific attention will be given to the 13 new public universities: illustrative case studies from three new public universities are included describing history, current situation, results achieved, ambitions and challenges.
    Date: 2013–09

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