A presentation by David Lam, Department of Economics and Population Studies Center, University of Michigan, as part of Impacts of Inequality on Children's Well-being panel discussion at the International Symposium on Cohort and Longitudinal Studies in Developing Contexts, UNICEF Office of Research - Innocenti, Florence, Italy 13-15 October 2014

1. Impact of baseline inequality on youth
transitions in education, health, and
employment in South Africa:
Evidence from the Cape Area Panel Study
David Lam
Department of Economics and Population Studies Center
University of Michigan
International Symposium on Cohort and Longitudinal
Studies in Developing Contexts
13-15 October 2014
Grand Hotel Mediteranneo
Florence, Italy

2. Research to study intergenerational
transmission of inequality
• Collaboration between University of Michigan and
University of Cape Town began in 1996
• One goal was to understand how extreme
inequality remains high across generations
• Major focus on education and school-to-work
transitions
• We began to plan a longitudinal study of young
people and transitions in education, employment,
sexual behavior, childbearing, and
intergenerational connections
• Focus on metropolitan Cape Town

3. Cape Area Panel Study
• A collaboration of the
University of Michigan and the
University of Cape Town
– Comprehensive survey covering
schooling, employment, families,
reproductive health
• Study began in 2002 with
4,752 14-22 year-olds
• Wave 2, 2003 and 2004
• Wave 3, 2005
• Wave 4, 2006
• Wave 5, 2009
• Public access data for waves
1-5 available at
www.caps.uct.ac.za

4. Example of high income neighborhood in
Cape Town

5. Example of low-income sample cluster

6. Composition of Baseline CAPS Sample
Table 1. Numbers of Household Members, Households,
and Young Adults in CAPS Sample, by Predominant
Population Group of EA
Population
Group of
Enumeration
Area
Household
members Households
Young
adults
Number % Number % Number %
Black/African 9,565 42.3 2,260 43.0 2,126 44.7
Coloured 9,884 43.7 2,036 38.7 1,879 39.5
White 3,182 14.1 960 18.3 747 15.7
Total 22,631 100.0 5,256 100.0 4,752 100.0

7. Sample size by population group
and attrition between waves,
CAPS respondents in grades 8 to 12 in 2002
Population
Group
Sample
size
CAPS Wave1
2002
Unweighted
percent
Weighted
percent
CAPS Wave 3 2005
Sample
size
or Wave 4 2006
Unweighted
percent
Weighted
percent
Rate of
attrition
Black/African 1098 46.66 29.83 955 45.91 29.21 13%
Coloured 911 38.72 48.66 862 41.44 52.12 5%
White 344 14.62 21.51 263 12.64 18.67 24%
Total 2353 100.0 100.0 2080 100.0 100.0 12%

8. 0 .2 .4 .6
Density
Kernel densities, log household Distribution of household per cap itian cinocmoem pee bry c raapcieta
Cape Area Panel Study Wave 1, 2002
African (mean=-.61)
Coloured (mean=.28)
White (mean=1.78)
-4 -2 0 2 4
Log income (zero mean)

9. 0 .2 .4 .6
Density
Kernel densities, log household Distribution of household per cap itian cinocmoem pee bry c raapcieta
Cape Area Panel Study Wave 1, 2002
African (mean=-.61)
Coloured (mean=.28)
White (mean=1.78)
-4 -2 0 2 4
Log income (zero mean)
Note that there
is very little
overlap in
African and
white
distributions

10. Kernel densities of standardized CAPS literacy Distribution of literacy and numeracy test asncdo rneusm beyra rcayc secores
0 .2 .4 .6 .8
Density
8th, 9th, 10th, 11th and 12th graders, 2002
African
Coloured
White
-3 -2 -1 0 1 2
Standardized literacy and numeracy score
Cape Area Panel Study, Wave 1

11. Distribution of literacy and numeracy test scores by race
Kernel densities of standardized CAPS literacy and numeracy scores
0 .2 .4 .6 .8
Density
8th, 9th, 10th, 11th and 12th graders, 2002
African
Coloured
White
-3 -2 -1 0 1 2
Standardized literacy and numeracy score
Cape Area Panel Study, Wave 1
As with income, little overlap in
African and white distributions, but
much more overlap in African and
coloured distributions

12. Enrollment in school or other educational institution,
CAPS retrospective histories, 2002
(based on respondents age 21-22)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
White Female White Male Coloured Female
Coloured Male African Female African Male
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Percentage enrolled
Age

13. Enrollment in school or other educational institution,
CAPS retrospective histories, 2002
(based on respondents age 21-22)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Africans start school later
High enrollment for all groups around ages 10-14
Coloured youth begin to drop out around age 16
White Female White Male Coloured Female
Coloured Male African Female African Male
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Percentage enrolled
Age

14. Years of completed schooling in retrospective histories,
CAPS Wave 1 respondents age 21-22
14
12
10
8
6
4
2
0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years of schooling completed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male

15. Years of completed schooling in retrospective histories,
CAPS Wave 1 respondents age 21-22
14
12
10
8
6
4
2
0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years of schooling completed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male
Whites move through
school faster at all ages;
grade repetition important

16. Years of completed schooling in retrospective histories,
CAPS Wave 1 respondents age 21-22
14
12
10
8
6
4
2
0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years of schooling completed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male
Whites move through
school faster at all ages;
grade repetition important
Females move through
school faster than males in
all groups

17. Years of completed schooling in retrospective histories,
CAPS Wave 1 respondents age 21-22
14
12
10
8
6
4
2
0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years of schooling completed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male
Whites move through
school faster at all ages;
grade repetition important
Females move through
school faster than males in
all groups
Gap between white males
and black males of 2.2
years at age 14

18. Number of grades failed in retrospective histories,
CAPS Wave 1 respondents age 21-22
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Number of grades failed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male

19. Number of grades failed in retrospective histories,
CAPS Wave 1 respondents age 21-22
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Number of grades failed
Age
White Female
White Male
Coloured Female
Coloured Male
African Female
African Male
Mean of 1 grade failed for
African and coloured males
at age 17

20. Payoff from panel data: Analyzing
progress through school
• One way we see direct evidence of grade
repetition in CAPS is through the retrospective
schooling histories.
• Even better direct evidence comes from following
respondents through school across multiple
waves of the panel.
• In the following slides we follow respondents who
were in grades 8 and 9 in 2002. They should be
in grades 11 and 12 in 2005.

21. Activity in 2005 for CAPS respondents who
were in grade 9 in 2002, by race
Enrolled in grade 10, 10%
Enrolled in grade 10, 3%
Enrolled in grade 11, 29%
Enrolled in grade 11, 16%
Enrolled in grade 11, 7%
Enrolled in grade 12, 28%
Enrolled in grade 12, 40%
Post-secondary, 1%
Post-secondary, 2%
Post-secondary, 6%
Not enrolled/not working,
22%
Not enrolled/not working,
23%
Not enrolled/working, 9%
Not enrolled/working, 16%
Not enrolled/working, 6%
Enrolled in grade 12, 80%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
African Coloured White
Not enrolled/working
Not enrolled/not working
Post-secondary
Enrolled in grade 12
Enrolled in grade 11
Enrolled in grade 10
Enrolled in grade 9

22. Table 6. Marginal effects from probit regressions for probability of advancing 3 grades
between 2002 and 2005, CAPS respondents in grades 8 or 9 in 2002
Marginal effects at X1
Variable African Coloured White
(1) (2) (3)
Grade 9 in 2002 -0.088 -0.133 -0.331
[0.051]* [0.062]** [0.140]**
Female -0.002 0.065 0.011
[0.059] [0.062] [0.248]
Number of grades failed, Wave 1 -0.07 -0.262 -0.296
[0.039]* [0.054]*** [0.176]*
Standardized LNE total score 0.123 0.308 0.214
[0.039]*** [0.067]*** [0.248]
Log hh income per cap. 0.04 0.135 0.208
[0.036] [0.043]*** [0.116]*
Mother's schooling 0.005 0.023 0.078
[0.014] [0.015] [0.053]
Father's schooling 0.002 0.017 -0.071
[0.009] [0.013] [0.061]
Household shock between 2002 and 2005 -0.067 -0.161 -0.409
[0.066] [0.075]** [0.184]**
Local unemployment rate for age and sex 0.106 -0.06 -0.034
[0.254] [0.169] [0.386]
Observations 385 351 78
Marginal effects at X1 evaluated for female in grade 8 in 2002, 1 failed grade, LNE=0, log income=0, parental schooling=8,
no shock, unemployment rate=0.6.

23. Table 6. Marginal effects from probit regressions for probability of advancing 3 grades
between 2002 and 2005, CAPS respondents in grades 8 or 9 in 2002
Marginal effects at X1
Variable African Coloured White
(1) (2) (3)
Grade 9 in 2002 -0.088 -0.133 -0.331
[0.051]* [0.062]** [0.140]**
Female -0.002 0.065 0.011
[0.059] [0.062] [0.248]
Number of grades failed, Wave 1 -0.07 -0.262 -0.296
[0.039]* [0.054]*** [0.176]*
Standardized LNE total score 0.123 0.308 0.214
[0.039]*** [0.067]*** [0.248]
Log hh income per cap. 0.04 0.135 0.208
[0.036] [0.043]*** [0.116]*
Mother's schooling 0.005 0.023 0.078
Previous academic achievement
and baseline household income
predict grade advancement in next
three years, but the effect is weaker
for Africans than for other groups.
[0.014] [0.015] [0.053]
Father's schooling 0.002 0.017 -0.071
[0.009] [0.013] [0.061]
Household shock between 2002 and 2005 -0.067 -0.161 -0.409
[0.066] [0.075]** [0.184]**
Local unemployment rate for age and sex 0.106 -0.06 -0.034
[0.254] [0.169] [0.386]
Observations 385 351 78
Marginal effects at X1 evaluated for female in grade 8 in 2002, 1 failed grade, LNE=0, log income=0, parental schooling=8,
no shock, unemployment rate=0.6.

24. Relationship
between
literacy and
numeracy
scores and
proportion
advancing 3
grades
between
2002 and
2005
0 .2 .4 .6 .8 1
Proportion passing (lowess)
White
Coloured
African
Proportion advancing 3 grades by LNE score
Higher LNE scores
are associated with
higher probability of
passing 3 grades, but
this relationship is
much flatter for
Africans.
-3 -2 -1 0 1 2
0 .2 .4 .6 .8
Kernel density
-3 -2 -1 0 1 2
Standardized LNE score

25. Impact of baseline test scores on
progress through school
• Students who performed better on our
literacy/numeracy test in 2002 were more likely to
advance three grades by 2005.
• This impact of test scores was much smaller,
however, for Africans.
• We think this is because the black schools do a
poorer job of evaluating school performance.
• The grade 12 matriculation exam is standardized
across schools and graded by external reviewers.
• If our theory is right, there should be no racial
difference in the impact of our baseline test score
on the probability of passing the matric exam.

26. Proportion passing matric by LNE score 0 .2 .4 .6 .8 1
0 .2 .4 .6 .8 1
Proportion passing (lowess)
-3 -2 -1 0 1 2
White
Coloured
African
Proportion advancing 3 grades by LNE score
Relationship between LNE scores and proportion advancing
three grades and passing matric
African
Coloured
0 .2 .4 .6
Kernel density
-3 -2 -1 0 1 2
Standardized LNE score
Proportion passing (lowess)
-3 -2 -1 0 1 2
0 .2 .4 .6 .8
Kernel density
-3 -2 -1 0 1 2
Standardized LNE score
In range of overlap, African slope is now similar to coloured
slope. Probability of passing is also similar at a given score.

27. Proportion passing matric by LNE score 0 .2 .4 .6 .8 1
0 .2 .4 .6 .8 1
Proportion passing (lowess)
-3 -2 -1 0 1 2
White
Coloured
African
Proportion advancing 3 grades by LNE score
Relationship between LNE scores and proportion advancing
three grades and passing matric
African
Coloured
0 .2 .4 .6
Kernel density
-3 -2 -1 0 1 2
Standardized LNE score
Proportion passing (lowess)
-3 -2 -1 0 1 2
0 .2 .4 .6 .8
Kernel density
-3 -2 -1 0 1 2
Standardized LNE score
Note about data: Estimating these densities and non-parametric
relationships requires large samples – critical for
analyzing inequality and its impact.

28. Using panel data to analyze sexual
behavior
• We also used CAPS to follow girls and boys into early
sexual behavior.
• Surprisingly, we found that girls who were farther
ahead in school, given their age, became sexually
active earlier, controlling for a large set of
socioeocnomic variables.
• We concluded that this was the result of the high rates
of grade repetition.
• Girls who were on track in school were exposed to
many classmates who were two or three years older.

29. 0 .1 .2 .3 .4 .5 .6
Age distribution , CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10

30. 0 .1 .2 .3 .4 .5 .6
Age distribution , CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10
60% age 16
96% age 15-17

31. 0 .1 .2 .3 .4 .5 .6
Age distribution , CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10
19% age 16
48% over age 17
28% over age 18
60% age 16
96% age 15-17

32. 0 .1 .2 .3 .4 .5 .6
Age distribution, CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10

33. 0 .1 .2 .3 .4 .5 .6
Age distribution, CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10
An African 15 year-old
in grade 10
would have:
68% of her
classmates at least
2 years older
48% of her
classmates at least
3 years older.

34. 0 .1 .2 .3 .4 .5 .6
Age distribution, CAPS Wave 1
Black/African Coloured White
1415 161718 1920 2122 14 1516 1718192021 22 1415 1617 181920 2122
Age Age Age
Density
Grade 10
An African 15 year-old
in grade 10
would have:
68% of her
classmates at least
2 years older
48% of her
classmates at least
3 years older.
A white 15 year-old
in grade 10
would have:
11% of her
classmates at
least 2 years
older
3% of her
classmates at
least 3 years
older.

35. Post-secondary enrollment within two years of
completing grade 12, Cape Area Panel Study
University only
University or University of Technology
Any Post Secondary
13%
19%
53%
30% 30%
65%
44% 46%
83%
African Coloured White

36. Table 4. Descriptive statistics, CAPS Waves 1-5,
CAPS respondents who completed grade 12 between in 2001-2007
African
(N=493)
Coloured
(N=520)
White
(N=263)
Variable Mean Mean Mean
Number of grades failed by 2002 0.61 0.31 0.10
Standardised total LNE score -0.09 0.62 1.38
Matriculation Exam Score 3.53 4.23 5.97
Prop. who got university exemption 0.23 0.26 0.68
Per capita HH income witihin 2 years before matric R 536 R 1 485 R 4 247
Log of per capita household income (zero mean) -0.78 0.19 1.36
Educational expenditure on post secondary R 6 562 R 10 007 R14 872
Mother's educational attainment (years) 8.98 9.69 12.85
Father's educational attainment (years) 8.50 9.94 13.22
Annual household income within 2 years before matric R 28 519 R 67 051 R 168 915
Household size within 2 years before matric 5.80 5.25 4.10
Prop. HH annual income <102000 (2008 rands) 0.98 0.83 0.38

37. Table 4. Descriptive statistics, CAPS Waves 1-5,
CAPS respondents who completed grade 12 between in 2001-2007
African
(N=493)
Coloured
(N=520)
White
(N=263)
Variable Mean Mean Mean
Number of grades failed by 2002 0.61 0.31 0.10
Standardised total LNE score -0.09 0.62 1.38
Matriculation Exam Score 3.53 4.23 5.97
Prop. who got university exemption 0.23 0.26 0.68
Per capita HH income witihin 2 years before matric R 536 R 1 485 R 4 247
Log of per capita household income (zero mean) -0.78 0.19 1.36
Educational expenditure on post secondary R 6 562 R 10 007 R14 872
Mother's educational attainment (years) 8.98 9.69 12.85
Father's educational attainment (years) 8.50 9.94 13.22
Annual household income within 2 years before matric R 28 519 R 67 051 R 168 915
Household size within 2 years before matric 5.80 5.25 4.10
Prop. HH annual income <102000 (2008 rands) 0.98 0.83 0.38

38. Table 4. Descriptive statistics, CAPS Waves 1-5,
CAPS respondents who completed grade 12 between in 2001-2007
African
(N=493)
Coloured
(N=520)
White
(N=263)
Variable Mean Mean Mean
Number of grades failed by 2002 0.61 0.31 0.10
Standardised total LNE score -0.09 0.62 1.38
Matriculation Exam Score 3.53 4.23 5.97
Prop. who got university exemption 0.23 0.26 0.68
Per capita HH income witihin 2 years before matric R 536 R 1 485 R 4 247
Log of per capita household income (zero mean) -0.78 0.19 1.36
Educational expenditure on post secondary R 6 562 R 10 007 R14 872
Mother's educational attainment (years) 8.98 9.69 12.85
Father's educational attainment (years) 8.50 9.94 13.22
Annual household income within 2 years before matric R 28 519 R 67 051 R 168 915
Household size within 2 years before matric 5.80 5.25 4.10
Prop. HH annual income <102000 (2008 rands) 0.98 0.83 0.38

39. Lowess estimates of the
relationship between baseline
household income and
university enrollment within
two years of matric

40. Lowess estimates of the
relationship between baseline
household income and
university enrollment within
two years of matric
• In range where distributions
overlap, gap between white
enrollment and African
enrollment is fairly small.
• African enrollment is above
coloured enrollment over
most of the income range.

41. Lowess estimates
of relationship
between grade 12
matriculation exam
scores and
university
enrollment.
0 .2 .4 .6 .8 1
Proportion
African University
Coloured University
White University
0 2 4 6 8
Matric score
0 .1 .2 .3 .4
Density
1 2 3 4 5 6 7 8
Matric score
African
Coloured
White

42. Lowess estimates
of relationship
between grade 12
matriculation exam
scores and
university
enrollment.
Gap between white
enrollment and
African enrollment is
fairly small at a
given matric score
0 .2 .4 .6 .8 1
Proportion
African University
Coloured University
White University
0 2 4 6 8
Matric score
0 .1 .2 .3 .4
Density
1 2 3 4 5 6 7 8
Matric score
African
Coloured
White

43. Implications
• Large differences in household resources and school
quality generate extreme racial inequality in measured
learning by grades 8 and 9.
• Panel data allow us to see that this baseline disadvantage
accounts for most of the racial differences in progress
through secondary school and transitions into post-secondary
education.
• Panel data also allow us to see that grade repetition in
black schools is poorly targeted, contributing to the racial
gap in schooling and in outcomes such as early sexual
debut.