Presidency on National Income Dynamics Study

Press statement on the initiation of a National Income Dynamics
Study (NIDS)

3 November 2006

As recommended by the "A Nation in the Making" discussion document and
endorsed by Cabinet, the Presidency has commissioned South Africa's first
national longitudinal survey, the NIDS, in order to track changes in living
standards and social mobility - important macro-social trends which cannot be
tracked through the existing cross-sectional household surveys.

The baseline study will be conducted by the Southern Africa Labour and
Development Research Unit (SALDRU) based at the University of Cape Town's
(UCT's) school of economics working with various research institutions,
including historically disadvantaged universities. The research team is led by
the SALDRU director and UCT economics professor, Murray Leibbrandt, and
SALDRU's chief research officer, Dr Ingrid Woolard. The project is overseen by
a Steering Committee made up of relevant senior government officials and
independent experts.

The planning phase of the mammoth R27 million baseline studies (which will
reach more than 30 000 people across the country) is currently underway.
Fieldwork will be carried out in 2007 in about 8 000 households across the
country by approximately 300 fieldworkers. Preliminary results are expected to
reach government in 2008/09. It is expected that the survey will be repeated
with the same individuals, even if they move to another part of the country
every two to three years. As a result, important information about issues such
as internal migration, transitions from school to work, and the forces which
shape the years from youth to adulthood are all expected from the survey.

"South Africa is a country undergoing significant rapid transition," said Dr
Vusi Gumede, chief policy analyst within the Presidency's Policy Co-ordination
and Advisory Services who is also chairperson of the project's steering
committee.

NIDS project director, Mastoera Sadan, also based in the Presidency, noted
that while South Africa had made considerable progress in understanding social
change, "there are some important household dynamics that are not yet fully
understood and which have not been captured by existing household surveys."

SALDRU director, Murray Leibbrandt, agreed noting that "a nuance
appreciation of dynamics at a household level has serious implications for
policy making. The study aims to increase the probability of pursuing
government interventions which would improve household coping strategies."

"This study should improve the South African Government's understanding of
the rapidly changing dynamics in society," said Dr Woolard from the survey
offices at UCT.

The NIDS will examine income, consumption and expenditure of households over
time. It will throw light on matters such as coping strategies deployed in
response to shocks and unexpected events whether negative or positive, such as
death in the family or an unemployed relative obtaining a job.

In addition to income and expenditure dynamics, other themes include the
determinants of changes in poverty and well-being; household composition and
structure; fertility and mortality; migrancy and migrant strategies; labour
market participation and economic activity; human capital formation, health and
education; vulnerability and social capital.

Existing cross-sectional surveys include the General Household Survey, the
Labour Force Survey and the Income and Expenditure Survey, all conducted by
Statistics South Africa. Dr Gumede noted that "existing cross-sectional surveys
provide a wealth of information about the well-being of sub-groups in the
country at a given point in time. Panel studies, however, permit analysis of
whether households are consistently poor or are going through a temporary
setback. Panel studies also help discover not just whether there is a high
degree of upward or downward mobility, but the factors influencing these
changes."

In South Africa, NIDS is the first national study of its kind. Hitherto,
most panel studies have been regional. For example, there is the KwaZulu-Natal
Income Dynamics Study (KIDS) conducted by the University of KwaZulu-Natal; the
Cape Area Panel Study (CAPS), which examines youth transitions into adulthood,
which is done by the UCT in collaboration with the University of Michigan; and
the Birth to 20, which is a study of child health and development, partnered by
the Human Sciences Research Council (HSRC), Wits University, Medical Research
Council (MRC) and the United Kingdom's Wellcome Trust.

Enquiries:
Dr Vusi Gumede
Tel: (012) 300 5477
E-mail: vusi@po.gov.za

Issued by: The Presidency
3 November 2006

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