Levels of poverty and inequality have been high and are rising in post-apartheid South Africa. People with very few assets appear to be caught in a poverty trap. Social networks, although valuable, will not be enough to help poor people climb out of poverty.

Research from the International Food Policy Research Institute, USA, University of Wisconsin, USA, and University of KwaZulu-Natal, South Africa, examines patterns of mobility among households in KwaZulu-Natal. Drawing on data collected in 1993 and 1998, and interviews carried out in 2001, the research looks at reasons for mobility and explores what role social relations play.

In deeply unequal societies, poor people can become trapped in a situation where they have very few assets, lack the opportunity to build up assets and cannot move ahead. This is often because they lack access to formal financial services such as loans and insurance, and the kinds of social networks such as friends with jobs, saving groups, burial societies and community associations that can help people find work or cope with economic downturns and other unexpected events.

The researchers seek to establish whether having a certain level of assets including land, livestock, machinery, labour and non-income financial assets such as an old age pension is necessary for a household to be likely to achieve upward mobility. In other words: is there a point below which people are too poor to climb out of poverty? The researchers identify a threshold - an asset base expected to provide a livelihood more than two times the conventional poverty line - below which households are likely to fall into a poverty trap.

The research finds that:

• Between 1993 and 2001, 44 percent of households were trapped in poverty, 38 percent were non-poor and stayed so, and only 2 percent moved upwards in a sustainable way.
• Households locked into poverty tend not to have stable income sources such as formal work, or social assets such as membership of organisations such as saving groups and food clubs, and have few ways of coping with unexpected events such as illness or death of a family member available to them.
• Non-poor households tend to have stable income sources, access to credit and to social networks that can help with finding jobs or lending money in difficult times.
• Social networks are more helpful for non-poor households.
• Social networks help less well-off households stabilise their incomes, but they do not help them move out of poverty.

The legacy of apartheid in South Africa made it a polarised society. Deep-rooted inequality has blocked conventional routes out of poverty. As a result the 1990s were characterised by low levels of social mobility with many poor people trapped in poverty.

The authors conclude that:

• Poor people in South Africa do not have the resources to provide much help to each other and are not connected to people who do.
• Government will need to ensure that people have access to a minimum asset base and to the markets needed in order to save and accumulate over time.

Source(s):
‘Exploring Poverty Traps and Social Exclusion in South Africa Using Qualitative and Quantitative Data’, Journal of Development Studies 42.2, pages 226-247, by Michelle Adato, Michael Carter and Julian May, 2006

Funded by: MacArthur Foundation

id21 Research Highlight: 16 November 2006

Further Information:
Michelle Adato
International Food Policy Research Institute
2033 K Street NW
Washington DC 20006-1002
USA

Tel: +1 202 862 5600
Fax: +1 202 467 4439
Contact the contributor: m.adato@cgiar.org

International Food Policy Research Institute

Michael Carter
University of Wisconsin
Madison
USA

Tel: +1 608 263 2478
Fax: +1 608 262 4376
Contact the contributor: mrcarter@wisc.edu

University of Wisconsin - Madison, USA

Julian May
Room F224 Memorial Tower Building
Howard College
University of KwaZulu-Natal
Durban
South Africa.

Tel: +27 31 260 2841
Fax: +27 31 260 2359
Contact the contributor: mayj@ukzn.ac.za

University of KwaZulu-Natal

Other related links:
'The impact of land reform in South Africa '

'Mother tongue first: Children’s right to learn in their own languages'

'A risky business: poverty and livelihoods in South Africa'

'Escaping poverty: Can policy reach the chronically poor?'

'Born poor, forever poor? Intergenerational transmission of poverty'

Pushing the "problems" underground? Left behind learners in South Africa

Does the legacy of apartheid perpetuate poverty?