Lack of social mobility in South Africa traps people in poverty

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 ResearchInstitute, USA,University of Wisconsin, USA,and University of KwaZulu-Natal, SouthAfrica, examines patterns of mobility amonghouseholds 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 relationsplay.

In deeply unequal societies, poor people can become trappedin a situation where they have very few assets, lack the opportunity to buildup assets and cannot move ahead. This is often because they lack access toformal financial services such as loans and insurance, and the kinds of socialnetworks such as friends with jobs, saving groups, burial societies andcommunity associations that can help people find work or cope with economicdownturns and other unexpected events.

The researchers seek to establish whether having a certainlevel of assets including land, livestock, machinery, labour and non-incomefinancial assets such as an old age pension is necessary for a household to belikely to achieve upward mobility. In other words: is there a point below whichpeople are too poor to climb out of poverty? The researchers identify athreshold - an asset base expected to provide a livelihood more than two timesthe conventional poverty line - below which households are likely to fall intoa poverty trap.

The research finds that:

• Between1993 and 2001, 44 percent of households were trapped in poverty, 38percent were non-poor and stayed so, and only 2 percent moved upwards in asustainable way.
• Householdslocked into poverty tend not to have stable income sources such as formalwork, or social assets such as membership of organisations such as savinggroups and food clubs, and have few ways of coping with unexpected eventssuch as illness or death of a family member available to them.
• Non-poorhouseholds tend to have stable income sources, access to credit and to socialnetworks that can help with finding jobs or lending money in difficulttimes.
• Socialnetworks are more helpful for non-poor households.
• Socialnetworks help less well-off households stabilise their incomes, but theydo not help them move out of poverty.

The legacy of apartheid in SouthAfrica made it a polarised society. Deep-rootedinequality has blocked conventional routes out of poverty. As a result the1990s were characterised by low levels of social mobility with many poor peopletrapped in poverty.

The authors conclude that:

• Poorpeople in South Africado not have the resources to provide much help to each other and are notconnected to people who do.
• Governmentwill need to ensure that people have access to a minimum asset base and tothe markets needed in order to save and accumulate over time.