Income poverty & grantsIncome poverty & grants

Children living in poverty

Author/s: Katharine Hall & Winnie Sambu
Date: November 2017

Definition

This indicator shows the number and share of children living in households that are income-poor.

Four different poverty lines are used:

  • An upper-bound poverty line that allows just enough money for basic nutrition and other essentials such as clothing (2015 value = R965);
  • A lower-bound poverty line that allows enough for essentials such as clothing but only if some nutritional costs are sacrificed (2015 value = R621);
  • A food poverty line that only allows enough for basic nutrition, and no other essentials (2015 value = R415);
  • An ultra-low international poverty line, linked to the SDGs (2015 value = R210).
The values of the poverty lines are increased in line with inflation each year, so that the real values remain constant.

Data


Data Source Statistics South Africa (2004 - 2016) General Household Survey 2003 - 2015. Pretoria, Cape Town: Statistics South Africa.
Analysis by Katharine Hall & Winnie Sambu, Children’s Institute, University of Cape Town.
Notes
  1. Children are defined as persons aged 0 – 17 years.
  2. Population numbers have been rounded off to the nearest thousand.
  3. Income is calculated as total reported earnings for household members over 15 years, plus value of social grants received by household, and divided by household size.
  4. Sample surveys are always subject to error, and the proportions simply reflect the mid-point of a possible range. The confidence intervals (CIs) indicate the reliability of the estimate at the 95% level. This means that, if independent samples were repeatedly taken from the same population, we would expect the proportion to lie between upper and lower bounds of the CI 95% of the time. The wider the CI, the more uncertain the proportion. Where CIs overlap for different sub-populations or time periods we cannot be sure that there is a real difference in the proportion, even if the mid points differ. CIs are represented in the bar graphs by vertical lines at the top of each bar.
Any definition of absolute poverty requires a poverty line. In the absence of “official” poverty lines, various lines have been used in South Africa. The definition of national poverty lines has been strongly contested as the poverty rate will depend on which poverty line is used. Until 2015 the Children Count project calculated child poverty rates using the Hoogeveen & Ozler poverty lines which were commonly used by economists.1 More recent poverty analyses have tended to use the national poverty lines proposed by Statistics South Africa, and from 2016 Children Count switched to using these poverty lines.

In 2011 Statistics South Africa proposed three poverty lines for South Africa.
2 These were calculated from the 2010/2011 Income and Expenditure Survey, using the internationally recognised “cost of basic needs” approach.3 Briefly, the poverty lines are calculated by 1) determining a reference food basket that would provide the minimum nutritional requirement of 2100 kilocalories per person per day; 2) calculating the cost of the food basket that would enable households to meet this nutritional standard; and 3) calculating an additional allowance for other basic necessities such as clothing, shelter, transport and education. Using these calculations, the three poverty lines are derived as follows:
  • The food poverty line is based on the cost of the minimum nutritional requirement of 2100 kilocalories per person per day, without any allowance for non-food basic necessities. The value of the food poverty line in 2011 prices was R335 per person per month. Anyone living below this line will be malnourished and their health and survival may be at risk.
  • The lower bound poverty line is calculated by adding to the food line the average expenditure on essential non-food items by households whose food expenditure is below but close to the food line. The value of the lower bound poverty line in 2011 prices was R501 per person per month. Those living below this line would not be able to pay for the minimum non-food expenses or would be sacrificing their basic nutrition in order to pay for non-food expenses.
  • The upper bound poverty line is calculated by adding to the food line the average expenditure on non-food items by households whose food expenditure is equivalent to the food line. The value of the upper bound poverty line in 2011 prices was R779 per person per month. This is lowest possible poverty line that allows for both minimum nutritional requirements and essential non-food expenses.
As money is needed to access a range of services, income poverty is often closely related to poor health, reduced access to education, and physical environments that compromise personal safety. A lack of sufficient income can therefore affect children’s rights to nutrition, education, and health care services.

International law and the Constitution recognise the link between income and the realisation of basic human rights, and acknowledge that children have the right to social assistance (social grants) when families cannot meet children’s basic needs. Income poverty measures are therefore important for determining how many people are in need of social assistance, and for evaluating the state’s progress in realising the right to social assistance.

No poverty line is perfect. Using a single income measure tells us nothing about how resources are distributed between family members, or how money is spent. But this measure does give some indication of how many children are living in households with severely constrained resources.

South Africa has very high rates of child poverty. In 2015, 62% of children lived below the upper bound poverty line. Income poverty rates have fallen substantially since 2003, when 79% (14.7 million) children were defined as “poor” at this income threshold. The reduction in the child poverty headcount is partly the result of a massive expansion in the reach of the Child Support Grant over the same period. Although there have been reductions in the child poverty rate, large numbers of children still live in poverty: in 2015, 11.6 million children lived below the upper bound poverty line.

There are substantial differences in poverty rates across the provinces. Using the upper bound poverty line, over three-quarters of children in Limpopo and the Eastern Cape are poor. Gauteng and the Western Cape have the lowest child poverty rates – at 39% and 35% respectively. Child poverty remains most prominent in the rural areas of the former homelands, where 83% of children are below the poverty line. The urban child poverty rate, by contrast, is 47%.

There are glaring racial disparities in income poverty: while nearly 70% of African children lived in poor households in 2015, and 39% of Coloured children were defined as poor, only 4% of White children lived below this poverty line. There are no significant differences in child poverty levels across gender or between different age groups in the child population.

Using Statistics South Africa’s lower bound poverty line (which does not provide enough for basic essentials), 46% of children were poor in 2015, and 29% (5 million children) were below the food poverty line, meaning that they were not getting enough nutrition
.
The international ultra poverty line used to track progress towards the Millennium Development Goals (MDGs) was $1.25 per person per day. This translated to R210 per person per month in 2015, using the IMF purchasing power parity conversion. This poverty line is extremely low – below survival level – and is not appropriate for South Africa. No child should be below it. In 2003, 43% of children (8 million) lived below the MDG poverty line. By 2015, the deadline for the MDGs, this had reduced to 12%. While this means that South Africa technically met the goal of halving the proportion of children living below the international poverty line, it still means 2.2 million children in extreme poverty.

This is now the baseline for the Sustainable Development Goals, which replaced the MDGs as a global agenda for development by 2030. Target 1.1 is to eradicate extreme poverty, using the same international poverty line of $1.25 per person per day. Target 1.2 is that by 2030 countries should reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions, according to national definitions. In terms of income poverty, this would mean reducing the number of children below the upper poverty line by 6 million.


1 Hoogeveen J & Özler B (2006) Poverty & inequalitiy in post-apartheid South Africa: 1995 - 2000. In: Bhorat H & Kanbur R (eds) Poverty and Policy in Post-Apartheid South Africa, Cape Town: HSRC Press.

2 Statistics South Africa (2014) Poverty Trends in South Africa: An examination of absolute poverty between 2006 and 2011. Pretoria: Statistics South Africa.
Statistics South Africa (2011) Methodological report on rebasing of national poverty lines and development on pilot provincial poverty lines: Technical report, No.03-10-11. Pretoria: Statistics South Africa.

The General Household Survey asks a set of questions to establish whether household members over 15 years are economically active. For those who are economically active and report their earnings, these amounts are standardised to monthly values.

For those who report earnings in income bands rather than discrete amounts, each income bracket is split into deciles for those who indicated an income in that bracket, and a uniform distribution of income is assigned within each income bracket decile, for those who indicated an income in that bracket.

For those who are economically active but did not provide a discrete income amount or indicate an income bracket (unspecified/refused), the median income for men and women in each population group is allocated. The medians are calculated separately for each year.

Total household income from earnings is calculated as the total earnings for all household members over 15 years. Total household income from social grants is calculated by allocating the grant amounts for that year for each type of grant reported to be received by household members. Total household income is derived by adding total income from earnings and grants. Per capita income is calculated by adding all reported income for household members older than 15 years, including social grants, and dividing the total household income by the number of household members.

The three South African poverty lines were set in 2011 Rand values. This are inflated using headline CPIX reported by Statistics South Africa for each year. Per capita income is calculated by dividing total household income equally by the number of household members.

In addition to the three poverty lines (upper, lower and food poverty) is the $1.25-a-day international poverty line. This poverty line is used by the World Bank and other international groups for monitoring poverty rates in developing countries and is used as an ultra poverty line for reporting against the MDGs and SDGs.

There are many limitations to working with poverty lives and this method will almost certainly result in an over-estimation of the poverty rate because both income and social grants are under-reported in the General Household Survey. !--{15117845213301}-->
The numbers are derived from the General Household Survey, a multi-purpose annual survey conducted by the national statistical agency, Statistics South Africa, to collect information on a range of topics from households in the country’s nine provinces. The survey uses a sample of 30,000 households. These are drawn from Census enumeration areas using multi-stage stratified sampling and probability proportional to size principles. The resulting estimates should be representative of all households in South Africa.

The GHS sample consists of households and does not cover other collective institutionalised living-quarters such as boarding schools, orphanages, students’ hostels, old-age homes, hospitals, prisons, military barracks and workers’ hostels. These exclusions should not have a noticeable impact on the findings in respect of children.

Changes in sample frame and stratification
The sample design for the 2015 GHS was based on a master sample that was designed in 2013 as a general purpose sampling frame to be used for all Stats SA household-based surveys. The same master sample is shared by the GHS, the Quarterly Labour Force Survey, the Living Conditions Survey and the Income and Expenditure Survey. The 2013 master sample is based on information collected during the 2011 population census. The previous master sample for the GHS was used for the first time in 2008, and the one before that in 2004. These again differed from the master sample used in the first two years of the GHS: 2002 and 2003. Thus there have been four different sampling frames during the 14-year history of the annual GHS, with the changes occurring in 2004, 2008 and 2013. In addition, there have been changes in the method of stratification over the years. These changes could compromise comparability across iterations of the survey to some extent, although it is common practice to use the GHS for longitudinal monitoring and many of the official trend analyses are drawn from this survey.

Weights
Person and household weights are provided by Stats SA and are applied in Children Count analyses to give estimates at the provincial and national levels. The GHS weights are derived from Stats SA’s mid-year population estimates. The population estimates are based on a model that is revised from time to time when it is possible to calibrate the population model to larger population surveys (such as the Community Survey) or to census data.

In 2013, Stats SA revised the demographic model to produce a new series of mid-year population estimates. The 2013 model drew on the 2011 census (along with vital registration, antenatal and other administrative data) but was a “smoothed” model that did not mimic the unusual shape of the age distribution found in the census. The results of the 2011 census were initially questioned because it seemed to over-count children in the 0 – 4 age group and under-count children in the 4 – 14-year group.

The 2013 model was used to adjust the benchmarking for all previous GHS data sets, which were re-released with the revised population weights by Stats SA, and was still used to calculate weights for the GHS up to and including 2015, even though it is now known that the mid-year population estimates on which the weights are based are incorrect. All the Children Count indicators were re-analysed retrospectively, using the revised weights provided by Stats SA, based on the 2013 model. The estimates are therefore comparable over the period 2002 to 2015. The revised weights particularly affected estimates for the years 2002 – 2007.

It is now thought that the fertility rates recorded in the 2011 population census may have been an accurate reflection of recent trends, with an unexplained upswing in fertility around 2009 after which fertility rates declined gradually. Similar patterns were found in the vital registration data as more births were reported retrospectively to the Department of Home Affairs, and in administrative data from schools, compiled by the Department of Basic Education. In effect, this means that there may be more children in South Africa than appear from the analyses presented in these analyses, where we have applied weights based on a model that it is now known to be inaccurate.

Disaggregation
Statistics South Africa suggests caution when attempting to interpret data generated at low level disaggregation. The population estimates are benchmarked at the national level in terms of age, sex and population group while at provincial level, benchmarking is by population group only. This could mean that estimates derived from any further disaggregation of the provincial data below the population group may not be robust enough.

Reporting error
Error may be present due to the methodology used, i.e. the questionnaire is administered to only one respondent in the household who is expected to provide information about all other members of the household. Not all respondents will have accurate information about all children in the household. In instances where the respondent did not or could not provide an answer, this was recorded as “unspecified” (no response) or “don’t know” (the respondent stated that they didn’t know the answer).

For more information on the methods of the General Household Survey, see the metadata for the respective survey years, available on Nesstar or DataFirst