Are African Workers Getting Ahead in the New South Africa? Evidence from KwaZulu-Natal, 1993-1998

Abstract

[Excerpt] In this paper, we use the KIDS panel data to answer three questions about the ‘progress’ of African workers in this one province in post-apartheid South Africa. First, how have African workers progressed as a group? Secondly, which African workers have progressed the most, and by how much have they progressed? Thirdly, to what extent is the progress made by workers driven by transitions between employment and unemployment, or between informal and formal sector employment? We reach the following major findings. First, African workers in KwaZulu-Natal had quite diverse experiences, but experienced positive progress on average. Second, those who progressed the most during the 1993 to 1998 period were individuals who started the least well off. This is a surprising conclusion given the kinds of evidence produced from cross-sectional data. Transitions between employment and unemployment and between formal and informal employment have a strong impact on real earnings, but these real earnings changes are not always as we might expect. Additionally, the sizeable changes that take place for those who do not experience such an employment transition implies that dynamics within sectors also deserve attention. A more technical analysis, complete with a variety of caveats, can be found in a Report to the Ministry of Finance (Cichello, Fields and Leibbrandt, 2001). The purpose of this article is to share these findings at a less technical level and to highlight the necessity of panel data in answering these questions.