Policies are key determinants of the income distribution. Some policies aim at reducing inequality, poverty, and promoting social cohesion. But other policies either by design, as collateral effect, or as unintended consequence, can benefit the most advantaged in the population and amplify inequality. In our research we have evaluated some of these policies.
Papers
Pellicer, Miquel, and Vimal Ranchhod. 2023. “Understanding the Effects of Racial Classification in Apartheid South Africa.” Journal of Development Economics 160 (January): 102998. https://doi.org/10.1016/j.jdeveco.2022.102998.
The apartheid era began in 1948 in South Africa, and was implemented by passing several racially discriminatory laws. Most of the key legislative changes were introduced between 1949 and 1953. The cornerstone of this racially stratified legal system was the Population Registration Act of 1950, which required that all South Africans needed to be registered and assigned to an official racial category. We study the effect of racial classification in the context of these legislative reforms, by estimating the causal effect of being classified as White, relative to being classified as Coloured, on labour market outcomes. For identification we exploit a policy change that privileged ancestry over appearance in the process of racial classification for those born after 1951. Using census data from 1980, 1991, and 1996, we find a discontinuity in racial shares for cohorts born after 1951. Our preferred estimates indicate that being classified as White resulted in a more than fourfold increase in income for men. This corresponds to over 90% of the difference in mean incomes between men in the two population groups. Our findings for women are inconclusive.
Awarded the Francis Wilson Memorial Prize for best article published in a peer reviewed journal on development issues in South Africa.
De Juan, Alexander, Carlo Koos, Miquel Pellicer, and Eva Wegner. 2022. “Can Reconstruction Programmes Improve Political Perceptions in Conflict Contexts? Evidence from Eastern Democratic Republic of the Congo.” South African Journal of Economics 90 (4): 427–55. https://doi.org/10.1111/saje.12330
Postconflict reconstruction programmes often aim to improve state–society relations but fail to spell out the underlying process. We specify a mechanism that links aid programmes through (1) short-term and (2) medium-term improvements in basic services and (3) subjective progress to (4) perceptions of the state and spell four conditions (quality, sustainability, magnitude and attribution to the state) that must be met for this process to occur. We use this framework to evaluate a large-scale reconstruction programme in the Democratic Republic of Congo (DRC). We find that the programme improved basic services in the short term and midterm and positively affected beneficiaries’ subjective well-being. However, we do not find evidence that aid benefits have translated into political trust towards state institutions—on the contrary, project villages display slightly more negative attitudes than control villages. We suggest that this is due to lack of attribution of the improvements to the state that which was included in the selection phase but largely absent in the implementation. This implies that improved services can erode state legitimacy when citizens interpret the provision by nonstate actors as a signal of the state’s inability or unwillingness to provide these services.
Chelwa, Grieve, Miquel Pellicer, and Mashekwa Maboshe. 2019. “Teacher Pay and Educational Outcomes: Evidence from the Rural Hardship Allowance in Zambia.” South African Journal of Economics 87 (3): 255–82. https://doi.org/10.1111/saje.12227
This paper studies the effect of unconditional teacher salary increases on teacher and student outcomes. To study the issue, we evaluate the rural hardship allowance in Zambia, which corresponds to a salary increase of 20%. This allowance is allocated to schools on the basis of a distance criterion allowing us to use a regression discontinuity design. We use administrative data from 2004 to 2015 on school, teacher characteristics and test scores. The administrative data are complemented with a telephone survey of schools close to the eligibility threshold. We find that crossing the threshold increases the share of teachers obtaining the allowance by 40%. Because of some non-compliance with the allocation rule, our estimates are fairly imprecise. Focusing on provinces with better compliance we find some, albeit weak, evidence that the allowance increases the stock of teachers. We, however, find no effects on teacher characteristics or on student test scores.
Pellicer, Miquel, and Patrizio Piraino. 2019. “The Effect of Nonpersonnel Resources on Educational Outcomes: Evidence from South Africa.” Economic Development and Cultural Change 67 (4): 907–34. https://doi.org/10.1086/700103
Little credible evidence exists on the effect of nonpersonnel school expenditures on educational outcomes in developing countries. This paper studies the impact of nonpersonnel funding on school outcomes exploiting the peculiar way in which these resources are allocated in South Africa. Government funding follows quintiles constructed on the basis of school poverty scores. This creates discrete jumps in the allocation of funding, and we use a regression discontinuity approach to analyze its effects on school outcomes at the end of high school. Our results show a small but positive effect of resources on student throughput during the last years of high school and on the number of students writing the matriculation exam. However, additional resources do not translate into a higher number of successful exams, leading to an overall negative effect on pass rates. We suggest that these findings may have to do with schools reacting to the per-pupil nature of funding.
Pellicer, Miquel. 2018. The evolution of returns to education in the Middle East and North Africa: Evidence from comparable education policy changes in Tunisia. Economics of Education Review 62: 183-191. https://doi.org/10.1016/j.econedurev.2017.11.008
Returns to education in the Middle East and North Africa (MENA) region are thought to have decreased in recent decades leading to youth frustration and political mobilization. Existing estimates of the evolution of education returns in the region have not had a causal focus and observed patterns may be driven by changes in selection bias as educational attainment expanded from a privileged few to large masses of the population. This paper exploits three comparable education policy changes over more than two decades in Tunisia to estimate the effect of education on public sector employment for different cohorts born from the 1950s to the 1970s. I combine census and labor force surveys from 2004 to 2010 amounting to more than one million observations of relevant cohorts. I find that returns have decreased across cohorts by around 1/3 although they remain large even for the later cohorts.
Leibbrandt, Murray, Eva Wegner, and Arden Finn. 2011. “The Policies for Reducing Income Inequality and Poverty in South Africa.” SALDRU Working Papers, SALDRU Working Papers, , September. https://ideas.repec.org//p/ldr/wpaper/64.html.
rends in inequality, poverty, and redistribution in post-apartheid South Africa have received intense attention especially in terms of measuring inequality and poverty levels and the proximate causes of these levels. We review this literature and find a set of established trends. Inequality levels have increased but the face of inequality has changed with present-day inequality displaying a lessened racial make-up than under apartheid. In contrast, poverty has decreased but is still bears the strong racial makers of apartheid. The labour market continues to drive inequality. A related literature has concentrated on fiscal redistribution in South Africa after the transition, arguing that social policies are well targeted towards the poor with social grants being central in lifting people out of poverty. At the same time, these policies have not succeeded in reversing inequality trends and in providing equal opportunities for all South Africans. To bulk of paper probes this further. We use fiscal incidence analysis to show that redistribution increased slightly since 1993, that this redistribution is higher than in Latin America but far below European levels. Second, looking at spending for all social services we find a mixed picture. There has been an increase in spending since the end of apartheid on social policy and for a number of social policy items in the progressivity of this spending. At the same time, spending has not increased as a percentage of GDP and has become less progressive for social grants. Finally, we examine education policy in more detail. We find that the importance of tertiary education, as a predictor of income has increased considerably whereas individuals with low or incomplete secondary education were worse off in 2008, compared to 1993. Second, we find that state spending on education has increased since the early 1990s. The spending gap between rich and poor provinces has become much narrower but spending equality has not been reached. The academic achievements of students display high inequality, compared to international standards and there is also evidence that the capabilities of students have decreased, rather than increased, suggesting that increased spending has not translated into an increase in the quality of education provision.