The top tail of South Africa’s earnings distribution 1993-2014: Evidence from the Pareto distribution

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dc.contributor.author Wittenberg, Martin
dc.date.accessioned 2018-03-15T12:22:24Z
dc.date.available 2018-03-15T12:22:24Z
dc.date.issued 2018-03
dc.identifier.citation Wittenberg, M. (2018). The top tail of South Africa’s earnings distribution 1993-2014: Evidence from the Pareto distribution. Cape Town: SALDRU, UCT. (SALDRU Working Paper Number 224).
dc.identifier.isbn 978-1-928281-85-6
dc.identifier.uri http://hdl.handle.net/11090/908
dc.description.abstract We estimate the parameters of a Pareto distribution for South African earnings as measured through the October Household Surveys, Labour Force Surveys and Quarterly Labour Force Surveys, as assembled in the Post-Apartheid Labour Market Series (PALMS). We develop an outlier detection algorithm consistent with this distribution and then adjust the Gini coefficient for inequality in the top tail, using the robust estimation technique of Cowell and Flachaire. That procedure suggests that wage inequality is a bit higher than conventionally estimated. We also show that the top tail of the South African earnings distribution is ‘thick tailed’ and explore what that means. Our analyses show big shifts in the distribution in some of the surveys in ways that suggest measurement changes rather than changes in the underlying distribution. en_US
dc.description.sponsorship Funding from REDI3x3 for this project is gratefully acknowledged as are helpful comments from a REDI3x3 anonymous reviewer. Helpful feedback was also provided by participants at the Economic Society of South Africa biennial conference in Grahamstown, August 2017. Much earlier versions of this paper were presented at seminars at the University of Michigan and at a Data Quality workshop hosted by DataFirst in Cape Town. This research report was first published in December 2017 as Working Paper 46 of the Research Project on Employment, Income Distribution and Inclusive Growth (REDI3x3), funded by the South African National Treasury and based at SALDRU, University of Cape Town: www.redi3x3.org en_US
dc.language.iso en en_US
dc.relation.ispartofseries Saldru Working Paper;224
dc.subject Pareto distribution en_US
dc.subject Earnings en_US
dc.subject Inequality en_US
dc.title The top tail of South Africa’s earnings distribution 1993-2014: Evidence from the Pareto distribution en_US
dc.type Working Paper en_US


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