Social stratification, life chances and vulnerability to poverty in South Africa

The wave of upbeat stories on the developing world's emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and empirically measured. The contribution this paper makes to this literature is both conceptual and empirical. The conceptual contribution consists in proposing a schema of social stratification with particular relevance for the emerging and developing country context marked by high economic insecurity. Building on a recently developed framework that defines the middle class in relation to their (in)vulnerability to poverty, in this paper, we propose a multi-layered class model that differentiates five social classes: (i) the chronic poor, characterised by high poverty persistence, (ii) the transient poor, who have above average chances of escaping poverty, (iii) the non-poor but vulnerable, whose basic needs are currently being met but who face above average risks of slipping into poverty, (iv) the middle class, who are in a better position to maintain a non-poor standard of living even in the event of negative shocks, and (v) the elite, whose living standards situate them far above the average. The empirical contribution consists in the application of this conceptual innovation to the South African case using a model of poverty transitions that is fitted to four waves of panel data from the National Income Dynamics Study (NIDS) covering 2008 through to 2014/15. Given the classification derived in this paper, we find that only about 20 per cent of the South African population can be considered as stably middle class. Africans remain underrepresented in the middle class, and race is still one of the strongest predictors of poverty in South Africa. Members of larger, female headed, or rural households face a higher risk of poverty, and are less likely to enter the ranks of the middle class. Having access to stable labour market income, by contrast, is a key determinant for households to achieve economic stability in South Africa.This publication has been produced with the financial assistance of the Programme to Support Pro-Poor Policy Development (PSPPD), located in the Department of Planning, Monitoring and Evaluation (DPME), and of the World Bank Group, Poverty Global Practice Unit, Africa Region. Simone Schotte acknowledges support from the German Institute of Global and Area Studies and the Evangelisches Studienwerk Villigst. Murray Leibbrandt acknowledges the Research Chairs Initiative of the Department of Science and Technology and National Research Foundation for funding his work as the Chair in Poverty and Inequality Research. The authors are grateful to Francois Bourguignon, Denis Cogneau, Arden Finn, Lena Giesbert, Kanishka Kacker, Stephan Klasen, Jann Lay, Nga Thi Viet Nguyen, Victor Sulla, Martin Wittenberg, Ingrid Woolard, and Precious Zikhali for helpful suggestions. Responsibility for the content of the paper remains with the authors