Re-estimating gender differences in income in South Africa: The implications of equivalence scales

Abstract

Most studies of poverty and inequality in South Africa measure individual welfare by deflating total household resources, such as income, by household size. This per-capita method makes no adjustments for the different consumption needs of children or for household economies of scale. However, in addition to being more likely to live in households where average per-capita household income is lower compared with men, we show that women in South Africa also live in significantly larger households which include more children. These gendered differences in household composition are driven to a large degree by low rates of co-residency between men and women. We therefore investigate how adjusting household resources for the presence of children and economies of scale affects measures of the gender gap in income.