Since the 1970s informal settlements or slums have grown dramatically in number and size on the outskirts of South Africa’s economic centres in order to satisfy urban unskilled and semi-skilled labour demand. However,provision of basic services has not kept pace with the rapid growth of the urban slum population. In addition, school resources are constrained by the settlement of internal migrants on the outskirts of, and within cities and large towns. The mismatch between urban population growth and service delivery has manifested itself in protests, which are often violent and damaging to political stability.

The South African experience, and indeed that of developing countries in general, suggests that while migration to urban informal areas may serve a necessary labour market function of reducing search costs for both the firm and worker, it by no means guarantees that individual rural-urban migrants and their family are better off than their rural counterparts who decide not to migrate in terms of education and health outcomes. It is also unclear whether or not slum settlement allows for social mobility in the urban environment.

This paper therefore investigates whether slum settlement provides distinct welfare advantages, and whether slum settlement allows for social mobility through the labour market. The paper first identifies the characteristics of individuals most likely to form new urban informal area households. It finds that youth and recent migration significantly increase the probability of becoming the head of a new urban informal area household. Additionally, the longitudinal data also shows that residential mobility for urban informal area residents is limited, casting doubt on the characterisation of informal areas as transitory phenomena. Labour market analysis also finds evidence of labour market penalties for urban informality, in the forms of poor employment prospects, weak occupational mobility and low wages for urban informal area residents relative to their urban formal area counterparts. This paper’s contribution to the literature is its use of longitudinal data to shape a dynamic perspective on new urban informal household formation, and labour market prospects for urban informal area residents in the South African context.

Biography

Eldridge Moses currently works as a Lecturer in the Department of Economics, Stellenbosch University.

Date: Tuesday 23 October 2018

Time: 12.30 -13.30

Venue: ACMS Seminar Room 2163, South East Wing, Second Floor, Solomon Mahlangu House, University of the Witwatersrand East Campus