Template-Type: ReDIF-Paper 1.0
Title: Earnings inequality over the life-course in South Africa
Number: a2fcd8c8-cd0f-4cd7-929c-acac0c02f6be
Handle: RePEc:avg:wpaper:en11634
Publication-Status: Published in Research Papers
Author-Name: Rocco Zizzamia, University of CapeTown
Author-Name: Vimal Ranchhod, University of CapeTown
Abstract: Earnings inequality is usually calculated from a distribution which is measured at a point in time. However, because we typically observe a positive age earnings profile, a part of cross sectional inequality is explained by age-related differences in earnings across age cohorts. When inequality is computed using earnings measured over the lifetime, these age-specific differences are averaged out. However, there are also factors that may drive up inequality in earnings measured over time relative to cross-sectional inequality for instance, low cross-sectional earnings are likely to be correlated with low wage growth and longer spells of unemployment, thereby compounding inequality. Using South African data, we investigate how these dynamic processes act simultaneously but over different time scales to both moderate and exacerbate inequality over time. Because the available panel data in South Africa spans only nine years, straightforwardly constructing a measure of lifetime earnings is not possible. We circumnavigate this challenge by constructing a synthetic lifetime panel by stitching together relevantly similar individuals across successive age cohorts.
Creation-Date: 2020-10-20
File-URL: https://www.afd.fr/sites/afd/files/2020-10-07-47-48/PR_160_VA_2_Web.pdf
File-Format: Application/pdf
Keywords: Afrique du Sud
Classification-JEL: Q
Length: 34