Fighting poverty in segregated cities: the case of South Africa

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Fighting povertyin segregated cities the case
of South Africa

• by
• Dr Harris Selod
• (INRA and CREST, France)

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Introduction

• City structure can deteriorate social outcomes
• Mismatch between residences and job opportunities
  
  
• (Kain, 1968).
• Residential segregation (Benabou, 1993).
• South African cities are characterized by
• Sprawl.
• Extreme segregation.
• Objectives
• Understand the poverty-enhancing structure.
• Formulate adapted policies.

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This presentation

• 1. Some facts about South African cities
• 2. Models of urban stratification in South
  Africa
  
• Barriers to human capital formation.
• Policy recommendations.
• 3. Future research
• Barriers to work.

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1. Facts about South African cities

• Apartheid organized racial segregation

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• Stark inequalities between population groups

Table 1. Indicators of social stratification in
Cape Town
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• High level of income and human capital
  stratification

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• Inequitable and inefficient city structure
• Geographical concentration of poverty exacerbates
  poverty and social deviances (epidemic theory of
  ghettos, Crane 1991).
  
• Poor services and housing shortage in peripheral
  areas confronted to rural in-migration.
  
• Sprawl high mobility costs borne by the poor.
• Divided geography (i) lack of social
  interactions
  
• (ii) tensions between the demands of the main
  tax base and the majority poor population.
  

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TO SUMMARIZE A structure and form which agg
ravates poverty and inequality, () which uses
resources inefficiently (City of Cape Town,
1999). Market forces have replaced race and
state control in shaping the pattern of urban
development (Turok, 2000).
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2. Models of urban stratification

• 2.1 J. Brueckner (1996)
•  Welfare gains from removing land-use
  distortions An analysis of urban change in
  post-Apartheid South Africa , Journal of
  Regional Science, 36, 91-109.
• Comparison of city structures under and after
  Apartheid efficiency gains.
  
• Segregation remains (market driven).

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• 2.2 H. Selod and Y. Zenou (2001)
•  Location and Education in South African Cities
  under and after Apartheid , Journal of Urban
  Economics, 49, 168-198.
  
• Does the abolition of Apartheid suffice to reduce
  human capital imbalances?
  
• (i.e. Can township kids benefit from school
  integration by attending the better-resourced
  former white schools
  
• located in white central areas?)
• Because the segregated urban structure remains
  after Apartheid, we show that
  

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Racial integration in schools
is restricted by long and costly commuting trips
from peripheral to central areas.
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• Main message subsidizing transport costs
• (or busing) can increase welfare.
• 2.3 H. Selod and Y. Zenou (2003, forthcoming)
•  Private versus public schools in post-Apartheid
  South African cities theory and policy
  implications , Journal of Development
  Economics.
• The increase in the number of private schools,
  mostly located in white areas, and charging
  soaring school fees, is perceived as as barrier
  to school integration.

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• We model the increase in private-school fees and
  analyze the efficiency of education policies.
  
• We consider an urban model with school choice and
  residential choice. White families control a
  representative private school and choose its
  school fee, taking into account
• school quality effect (per-pupil spending and
  exclusion)
  
• marginal cost effect (paying the fee)
• land rent effect

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• The market solution is suboptimal (whites
  overprice education so as to reduce the negative
  human capital externalities incurred by their
  children). Some Coloureds and Asians can afford
  private schools but few Blacks can.
• We consider education policies subject to the
  constraint that private schools may freely choose
  their fees
  
• Transportation subsidies
• Private-school vouchers
• Public-school spending

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• RESULTS
• Inefficient policies
• (countered by a raise in school fees)
• Uniform vouchers
• Restricted vouchers decreasing with income
• ?? Welfare-enhancing policies
• Restricted vouchers increasing with income
• Public-school spending
• Transport subsidies or busing

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3. Future research barriers to work

• Spatial Mismatch in South African cities

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• How does distance to job opportunities
  deteriorate labor-market outcomes (Gobillon,
  Selod, Zenou, 2002)?
  
• The issue of data availability
• ? Levy database
• ? Census data at the neighborhood level
• ? Migration study

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Conclusion

• Space matters city-structures can be
  inefficient. There is room for economic
  policies.
  
• The spatial organization of cities can be key to
  analyzing problems such as education inequality
  and unemployment, especially in developing
  countries.