The Covid-19 pandemic has forced societies around the world to make difficult trade-offs, as they try respond to the public health crisis on one hand, and to the economic and social distress arising out of it on the other. In South Africa, these combined crises have exacerbated already high levels of unemployment, deepening poverty and heightening levels of hunger and food insecurity.

To mitigate the combined health, social and economic crises stemming from the Covid pandemic, South African President Cyril Ramaphosa announced, in April 2020, a range of support measures to mitigate their impact, including emergency social protection and employment stimulus measures.

Find out more about the Extension in South Africa

This research project aims to study the local stimulus effects of South Africa's PES and national social grants program. In order to do so, it brings together a wide range of existing and new data sources, such as shopper data provided by Shoprite Checkers and programme participant data from Harambee Youth Employment Accelerator, which are securely merged while preserving individual anonymity using local tech company Omnisient’s proprietary encryption technology. 

The primary research focus will be on the multiplier effects of these two programs, that is, the effects of the programs on the economy beyond the direct impact of spending on program participants and their households.

These program-specific multiplier effects are crucial to the overall evaluation of the programs, particularly in the context of budget constraints, but are difficult to identify in a credible empirical manner given the lack of work on them in South Africa. 

In studying them, this project thus has the dual objective of characterizing the spending patterns of stimulus beneficiaries and then examining how such spending is likely to stimulate economic activity in industries further up the product supply chain. Much of the analysis proposed is descriptive and extrapolative rather than causal when it comes to quantifying multiplier effects. 

Thus, the overall goal of this research is to provide an incomplete but conservative and credible quantitative baseline for thinking about program-specific multipliers in South Africa, in an environment where such evidence is lacking.
 

The publications and webinars related to this research project are available below.

In July 2019, Infusion Knowledge Hub conducted a study on opportunities for wholesale in Stock Road in Philippi in the Western Cape Province on behalf of a large South African supermarket chain. The purpose of the study was to understand the trading environment in the informal and small business market to elicit a value-added cash and carry shopping proposition (Vawda, Prinsloo and Prinsloo, 2019). 

In June 2022, as part of a research program launched by the Presidency of South Africa and Agence Française de Développement, funded by the European Union, Infusion Knowledge Hub replicated the study to determine whether there are shifts in purchasing behaviour amongst the informal and small traders that participated in the 2019 research. In doing so, the study aimed to provide granular data on shifts in the informal and small traders’ operating environment around Stock Road in Philippi between July 2019 and June 2022. In addition, the research investigated the spending patterns of 30 Social Relief Distress (SRD) grant recipients and 31 Basic Education Employment Initiative (BEEI) participants.

Find out more about the Extension in South Africa

This new research project aimed to contribute to the body of knowledge on the impact of social protection and employment stimulus measures on the formal and informal economies. 

Two studies analysing the local effects of the South African Presidential Employment Stimulus Initiative (PES) and the national social grants programme were produced: 

1. One study, presented in note form, that builds on Infusion's long-standing relationship with Shoprite to allow SALDRU to use Shoprite's customer data to explore the shopping habits of stimulus beneficiaries. The focus was on unpacking purchasing data related to beneficiaries who receive the Distressed Social Relief Grant and those who are part of the school assistants programme managed by the Department of Basic Education (DBE).
2. A research paper that details through descriptive and inferential statistical analysis the transfer to a mobile application, called NECTA, of a landmark study by Infusion and Shoprite conducted among informal vendors and "Spaza" stores in Philippi. This data provides an overview of what has been happening in these businesses since July 2019 (the date of the initial project), as well as an opportunity to see how the new "post-stimulus" environment is impacting the trade and decision-making of these business entities as well as some of their customers.
    

You will find below the research paper related to this project: 

• Measuring stimulus effects around Stock Road in Philippi on the Western Cape. 

South Africa’s spatial inequality translates in significantly different lived experiences among members of different communities across the country. Statistics South Africa gathers data on a range of socio-economic outcomes of individuals and households through an array of national surveys; these data can be analysed at the national, provincial, district and sometimes municipal level, and provide us with a sense of well-being, deprivation and inequities in these, between these different geographies. However, there is not yet one standardised set of data that would allow for a coherent, systematic and longer-term understanding, visualisation and tracking of a broad set of indicators on well-being, that allows for a better understanding of socio-economic outcomes at the community level. Yet, understanding this local context is important, as it is within that local reality that policies and interventions aim to make a difference. South Africa’s government has recognised this too and, with the introduction of its District Development (DD) Model, aims to see different spheres and departments of government work together for larger impact, “higher performance and accountability for coherent service delivery and development outcomes”. A consolidated, central point of information that is accurate and regularly updated, would provide a strong basis for the implementation South Africa’s DD Model. 

This project therefore proposes the development of an interactive, online Community Explorer that would allow researchers, policy-makers and civil society members to build a stronger understanding of well-being at the community (or main area) level in South Africa. Such an understanding is crucial to inform development efforts implemented at that community level. We suggest drawing on the local level information for the Steve Tshwete municipality to pilot the Community Explorer approach.

The local municipality of Steve Tshwete is part of the Mpumalanga province, an area that is home to one of the country's largest coal mining areas and accounts for 83% of the coal produced in South Africa. Steve Tshwete can be considered as one of the commercial centers of this province, with one of the largest local economies in the district dominated by the mining, manufacturing and financial sectors. As such, coal mining and the three coal-fired power plants currently in operation are by far the largest contributor to local employment, accounting for 40% of it. 

Find out more about the Extension in South Africa

This project proposes to leverage the data and tools already available on the South African Youth Explorer (and the related WaziMap tool). The SA Youth Explorer is a SALDRU-led project that constructs and maps a range of indicators that measure key dimensions of well-being among young people, at various geographical levels. Using Census 2011 data, these indicators are currently constructed for the following domains: demographics, education, living environment, economic opportunities and youth poverty (including income poverty and multidimensional deprivation). In addition, the project has begun the construction, verification and maintenance of a central database of service provision, that allows for government-provided services to be mapped down to the main area level.  Finally, it is the project’s aim to explore the possibilities of adding a third layer of knowledge with local labour market demand side information. As such, the overall aim of the proposed project is to provide “an understanding of the functionings of geographical areas as economic and social systems” and thereby “to promote the construction of an integrated and effective” approach to policy and planning that would ultimately contribute to the social betterment of all.

In addition, the project will use the administrative South African Revenue Service (SARS) and National Treasury (NT) Firm-Level (SARS-NT) Panel data developed as a joint SARS–National Treasury–UNU-WIDER initiative which gives matched employee-employer level information and thus allows computing labor market demand indicators. The greatest advantage of the administrative SARS–NT Panel data over other firm-level surveys is that it allows us to have employee-related information such as income, age and gender, as well as firm-level information such as labour costs, gross sales, industry sector, firm age, productivity, firm size, learnership and training cost .  Another advantage of the administrative SARS–NT Panel data which is important for the project is that the worker and firm information can be aggregated to four different geographical levels, namely: province, district municipality, local municipality, and main place . With these geographical levels, it is possible to create local averages of various worker and firm variables that can then be mapped alongside Higher Education Institutes present at the local level.
 

You will find below the two research papers related to this project: 

• Developing a Youth Labour Market Index for South Africa at the sub-national level
• Youth and the just transition. A profile of young NEET in Mpumalanga

MPAs are often associated with high poverty, being by design targeted at relatively untouched areas with low economic potential. Establishing an MPA can thus create a financial and social burden on resource-dependent communities, even if the benefits of doing so would bring higher yields or revenue in the future. Some stakeholders may benefit greatly from commercial activities (e.g., tourism, sale of higher-value products), while at the same time others are left out of the management processes, sometimes even those having most at stake. 

Because MPAs will most likely affect user groups disproportionately, inequality issues among stakeholders can easily arise.  Some aspects of MPA design, implementation, and management may contribute to positive ecological and well-being outcomes, while others will require tradeoffs. This coexistence of both co-benefits and trade-offs among stakeholder groups leads to tricky questions of equity, justice, and power in the design, implementation, and management of MPAs. There is a general lack of knowledge regarding how inequalities influence MPA outcomes. 

In brief, MPAs are a driver of inequalities in communities that rely heavily on marine resources, and a powerful tool to help reduce them. While being an important aspect of the well-being of the people involved and of the success of MPAs, inequality assessments and metrics are currently largely absent in the design, implementation and management of MPAs. This research project aimed at a deeper understanding of the inequality dynamics in MPAs in Indonesia, drawing upon existing data and specific case studies. It helped us gain better knowledge of how inequalities influence biological and social outcomes in MPAs, and brought insights on how to integrate inequality assessments and indicators in existing MPA policies in the country, at every level of governance.

Find out more about the Extension in Indonesia

This project first went through a scoping phase which enabled to better understand the role of MPAs and its link to inequalities. It then aimed to develop a framework for analyzing inequalities and their dynamics in MPAs in Indonesia, and a toolbox for mainstreaming inequalities in the design, implementation and management of MPAs. It has also fed into the policy dialogue conducted by the EU and AFD on marine resource management and environmental protection. 

This project therefore resulted in: 

• A working paper summarizing the current knowledge on marine protected areas and inequalities in Indonesia (carried out by LPEM).
• An in-depth research project on the links between inequality reductions and the management of marine protected areas, including cases studies of three MPAs (performed by the SMERU Institute).
• Training and capacity building activities with practitioners and MPA managers on the inclusion of inequalities in MPA management practices.
   

You will find below the different publications related to this project :

• The benefits of Marine Protected Areas in fighting inequality and fostering environmental sustainability in Indonesia
• Balancing conservation and community welfare: Enhancing the management of Marine Protected Areas in Indonesia
• Can social inclusion benefit ecosystems?

Watch the replay of the "Research Conversations" webinar on this topic (July 2023):

In Indonesia, poverty has been declined since 2006 from 17.75% to 9.41% in 2019 due to strong economic growth and other poverty reduction efforts. The inequality, however, remains considerably high. Since 2010, Indonesia’s Gini ratio remains above 0.38. The poverty and inequality situation has been worsen post-pandemic. Indonesia’s headcount poverty rate back to double digit, 10.14% in 2021, while the Gini ratio climbed to 0.384, its highest rate since 2018. While focus on economic inequality is important, the picture of inequality in Indonesia should be assessed through a multi-dimensional aspect, not limited to households income or expenditure. 

Indonesia is a fourth most-populous and also the largest archipelagic country in the world. It makes any policy context should be assessed carefully throughout population groups, income class, and geographical location due to the difference in the provision of public infrastructure and policy efforts within the country. As such, a comprehensive inequality diagnostic report is needed to assess overall condition of inequality in Indonesia not only using monetary indicator (income or expenditure), but also social assets, in terms of access to education, health, water and sanitation, employment, and other basic infrastructures needed for households. 

The Extension of the Research Facility on Inequalities will cooperate with leading research center, LPEM FEB UI, and national statistical office, BPS, to conduct comprehensive inequality assessment and produce an inequality diagnostic report as the basis for launching a national dialogue about inequality and stimulate policy interventions to overcome inequality.

Find out more about the Extension in Indonesia

The objectives of the Inequality Diagnostic Research in Indonesia are: 

1. to produce a working paper which will consolidate data and resources (papers) around inequality issues to profile the prevailing situation of inequality in Indonesia.
2. to conduct capacity building activities for national research center and the national statistical office in performing data analysis for the Inequality Diagnostic Research Report.
3. to introduce specific tools for multidimensional inequalities diagnostic in Indonesia.

This research has led to a comprehensive Inequality Diagnostic Research Report in Indonesia and contributes to public debate and discussion on Inequality in Indonesia. Indeed, this project performed a thorough analysis of multi-dimensional aspect of inequality in Indonesia and a comprehensive breakdown based on income groups, geographical locations, and gender. It also includes analysis of prior policies that have been taken by the government to reduce inequality and how it performs overtime. The output of this research will help government to identify priorities and policy options in order to further reduce them.
 

You will find below the research publications related to this project:

• The Inequality Diagnostic Report: Indonesia
• When Information Feeds Social Transformation in Indonesia: Understanding and Addressing Inequality outside Java through Diagnostic Dissemination

In South Africa, the social grant system is relatively comprehensive in scope, directly benefiting one in three individuals, and mainly empowering the most vulnerable such as children, the elderly and people with disabilities from poor households. Despite the progressiveness of this system, there remains a lack of assistance to the unemployed, who are presumed to be able to support themselves through the labor market (Ferguson, 2015). However, such a view overlooks the widespread and structural nature of unemployment in South Africa, where over 70% of the unemployed have been unemployed for more than a year. 

In this light, the expansion of the country's social grant system in response to the Covid-19 pandemic played an important role in filling this gap. On the margins of the system, a special Covid-19 grant of R350 was introduced to support this previously unreached and important group of unemployed adults. With one of the highest official unemployment rates in the world (32.6 percent in the first quarter of 2021), the grant was an important form of support for millions of vulnerable adults and was the first to use an explicit labor market eligibility criterion that could be considered a "labor market vulnerability transfer."

Find out more about the Extension in South Africa

Conducted by the UCT-DPRU team, the objective of this research project was to quantitatively study whether the Covid-19 grant acted as a source of labor market recovery by leading to increased investment in productive labor market activities. 

To do this, the research aimed to provide a detailed and quantitative descriptive analysis of transitions in labor market outcomes among Covid-19 grant recipients (measuring whether individuals moved from vulnerable to more productive activities, for example), as well as an analysis of the correlation between grant receipt and labor market outcomes. Finally, it estimated the causal effects of subsidy receipt on a range of productive labor market activities. 

The analysis exploited representative survey data collected during the pandemic in South Africa (from the National Income Dynamics Study: Coronavirus Rapid Mobile Survey, NIDS-CRAM) to answer the following cross-sectional and longitudinal questions about the role of the subsidy: 

• What is the correlational relationship between receipt and job-seeking behavior, labor market participation, and the probability of finding a job ?
• What is the correlation between receipt of the subsidy and the transition from a relatively unproductive labor market state to a more productive state over time?
• Does this relationship vary across different groups and subgroups of recipients?

You will find below the research paper related to this project:

• Can cash transfers to the unemployed support economic activity ? Evidence from South Africa. 

In Mexico, more than 40 percent of the population is under the official poverty line. At the same time, Mexico is characterized by a society in which the socioeconomic origin condition is highly related to life achievement, especially on the extremes of the socioeconomic distribution (Vélez-Grajales et al, 2014). On this matter, empirical evidence shows that once the population is divided by quintiles, 48 out of 100 that were born in the lowest quintile stay there for the rest of their lives. Above the rest of them, i.e. those who are able to move to another quintile, 22 reach the second quintile. In summary, previous result leaves in poverty 70 percent of those with origin in the first quintile. It has to be noted that only 4 out of 100 that were born in the lowest quintile will move up to the top quintile.

On the other hand, above those that were born in the top quintile, 52 out of each 100 stay there for the rest of their lives. Moreover, above those that experience downward mobility, 28 out of each 100 move to the fourth quintile, i.e., 80 out of each 100 that were born in the top quintile will stay at least in the fourth quintile. Finally, it has to be noted that only 2 out of 100 that were born in the top quintile will move down to the lowest quintile. This means social mobility is very low.

This project is part of the first phase of the Research Facility on Inequalities, coordinated by AFD and funded by the European Commission's Directorate-General for International Partnerships over the 2017-2020 period. The first phase of the Facility has led to the conduct of 22 research projects and the publication of around 100 research papers and policy briefs.

How are economic inequality and social mobility related? Is it possible that the highest levels of socioeconomic persistence (lower social mobility) in terms of origin determined, in part, both perception and tolerance against economic inequality? The Mexican case, which is one where socioeconomic regional disparities are significant, represents a good option to analyze if such relationship holds. Moreover, there is still a gap in the literature for explaining the mechanisms behind the observed negative relationship.

Additionally, an important and relevant unanswered question for the Mexican case is the perception of Mexicans about inequality and social mobility levels. What if Mexicans think that the country is one of equal opportunities and results for all? Policy implications should be different among different perception scenarios. In any case, it is necessary to get information in order to understand the mechanisms at household and local level that explain the potential distance between perception and reality.

First, using a multivariate analysis method, relative intergenerational mobility can be estimated for each macro-region of the country. Several inequality measures will be estimated, but for several points in time. The researchers have chosen to do so because it is possible that not current but origin economic inequality is the relevant one for intergenerational social mobility. Once the relationship is estimated, a discussion on the mechanisms behind it should be developed. The empirical analysis will be mainly based on the “Encuesta ESRU de Movilidad Social en México 2017”.

Additionally, work with groups in 4 different cities with different levels of socioeconomic performance will be held. The researchers expect to do fieldwork in at least two different spots within each city: one for a group of medium-high socioeconomic level and one of medium-low socioeconomic level. The interview will include a measure for both inequality and social mobility. In such a way, the researchers will be able to understand in a better way the relationship between perceptions and objective measures on the variables of research interest.

See this project's 2 minutes pitch from Alice Krozer, researcher at Colegio de México:

You may find the research papers and the policy briefs linked to this project here :

Research papers:
- Social mobility in Mexico. What can we learn from its regional variation?
- Perceptions of inequality and social mobility in Mexico

Policy briefs:
- Wide regional differences in social mobility across Mexico
- Inaccurate public perceptions of inequality and social mobility in Mexico

Find the presentation of the research paper "Perceptions of inequality and social mobility in Mexico" by Aurora Ramirez Alvarez (Colegio de Mexico) during the first webinar of the Research Facility on Inequalities: 

Addressing persistent inequalities in income and other dimensions of wellbeing is a key policy objective of the Sustainable Development Goal 10. Multilateral and bilateral donor agencies have been directing their efforts towards promoting good governance, human and economic development, fighting hunger and reducing inequality. 

The increase in development funding towards inequality reduction is accompanied by a need to monitor progress on the SDG 10 but most importantly, by the need to evaluate the contribution of development towards achieving this goal. However, measuring the distributional impacts of development cooperation projects is a challenging task due to a myriad of factors, including the effects that domestic redistributive policies, the structure of labour markets and other factors, such as institutions, have on inequality. The methodology developed by Morabito et al. enables the analysis of the potential contributions of development projects on inequality by looking primarily at the extent to which they disproportionally benefit the most vulnerable through a mix of analytical tools (a scoreboard, a statistical analysis of development projects based on the Equity Tool, a fiscal incidence analysis).

This methodology has first been tested on three development projects funded by AFD in Cameroon, Colombia and Tunisia as part of the first phase of the Research Facility on Inequalities. 

A second phase of the research project was launched in 2022 with the aim to extend the initial phase, to further test the validity of the methodology with respect to income and other forms of inequalities and to develop the guidelines for an inequality marker.

The initial phase of the  project aimed at piloting the application of the methodology developed by the researchers on three projects funded by the AFD: 

1. A programme supporting urban housing improvements in Tunisia;
2. A programme focusing on capacity-building of Small- and Medium-Sized Enterprises in Cameroon;
3. A budget support operation aimed at supporting a health sector reform in Colombia.

The objective was to test the methodology and evaluate the relevance of its results, and, based on these findings, to review and adjust the methodology itself.

The second phase of the project aimed:

1. To develop the guidelines for an inequality marker for development cooperation;
2. To further test the methodology on four AFD and EU development programmes: a programme promoting sustainable access to electricity for the unserved poor rural populations in Benin; a programme improving the health and living conditions of the inhabitants of the rural district of Isingiro (Uganda) and its refugee camps; a programme facilitating trade between Ethiopia and Djibouti and enabling businesses and producers, as well as the most vulnerable populations, to benefit from these improvements; and a programme contributing to the adaptation of the communities to climate change in Vietnam. 

The initial study identified whether programmes’ beneficiaries of the three selected interventions belonged to the Bottom 40% of the wealth distribution, through a mix of analytical tools:

1. First, a scoreboard that assessed whether or not inequality reduction was a central objective of development programmes;
2. Second, the Equity Tool, which helped assess the position of direct beneficiaries within the national (urban or rural) wealth distribution;
3. Third, the Commitment for Equity Tool, which helped estimate the distributional impact of general or sectoral budget support.

The methodological steps of the second phase of the research project were the following:

• Refining and upgrading the inequality markers and the scoreboard to provide clear benchmarks and indicators, aligned with evaluation approaches used by the European Commission, to assess whether development interventions focus on the poorest bottom 40% individuals, households or vulnerable groups that are targeted by specific development policies;
• Extending the scope of the Equity Tool questionnaire to include questions that capture the distribution of projects beneficiaries among vulnerable groups (women, ethnic, religious minorities, etc.);
• Applying the revised methodology to the four case studies.

Results of the first phase of the project

Overall, the results underscore the importance of considering a pro-poor targeting ex-ante when designing development cooperation interventions that explicitly (or implicitly) aim to contribute to the reduction of inequalities in partner countries. The main strength of the methodology is that it allows an assessment of the potential reach of interventions for the bottom 40 percent of the income distribution. Therefore, the information provided thanks to this methodology can be critical to fine-tune policies before they are implemented and maximize their redistributive impact.

You may find the research paper here: The distributional impacts of development cooperation projects

Results of the second phase of the project

The second phase of this project resulted in:

• The elaboration of guidelines for the implementation of the methodology, which were used to develop the European Commission's Inequality Marker. The I-Marker assesses whether, and to what extent, inequality reduction is an objective of development intervention. For this purpose, a set of criteria has been developed to establish if: - I-0: Inequality reduction is not targeted; - I-1: Inequality reduction is a significant objective; - I-2: Inequality reduction is the principal objective. The I-Marker focuses on the bottom (poorest) 40% or socio-economically disadvantaged individuals, households or groups. Watch the video on the Inequality Marker for more information.
• A report on the testing of the methodology on the four case studies : Assessing the distributional impacts of development interventions - the Inequality Marker

This project highlighted the importance of identifying direct and indirect beneficiaries of the projects, but also, more broadly, of having a complete understanding of the development cooperation interventions, which are being analyzed, especially their objectives and conditionalities. 

Equally important is the involvement of key stakeholders to communicate the objectives, scope and limitations of the studies. In some cases, the inclusion of a qualitative component in the form of interviews, consultations, or eventually field missions, may be required to ensure the successful implementation and completion of studies.