Beyond Unearned Income: The Contribution of Rural Youth to Earned Household Income in the Free State Province of South Africa

Johannes I. F. Henning ()
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Johannes I. F. Henning: Department of Agricultural Economics, University of the Free State (UFS), 205 Nelson Mandela Drive, Bloemfontein 9300, South Africa

Societies, 2025, vol. 15, issue 10, 1-18

Abstract: South Africa’s urbanization is often driven by poverty, unemployment, and limited resource access. Unearned income, such as social grants and other sources, has contributed to poverty alleviation. However, concerns have also been raised that this unearned support may reduce individuals’ motivation to pursue earned income opportunities. This study investigates whether a two-step modelling approach provides better insight than a single-framework model to assess the influence of youths’ access to resources on household income generation. The results indicate that the two-step model is more effective, as different factors influence the decision to earn income and the amount earned. Youth unemployment and household receipt of remittances had similar effects on both the decision to earn income and the amount earned. In contrast, youth involvement in agriculture was positively associated with the decision to earn income but negatively associated with the amount of income. Youth-headed households face additional constraints due to limited access to and ownership of productive resources. The study concludes that a two-step approach provides more information and thus a more accurate understanding of rural income dynamics. Enhancing youth access to quality resources and evaluating the effectiveness of support programs are essential for fostering income generation and improving rural livelihoods.

Keywords: rural livelihoods; unearned income; youth economic participation; poverty alleviation; sustainable livelihoods framework (search for similar items in EconPapers)
JEL-codes: A13 A14 P P0 P1 P2 P3 P4 P5 Z1 (search for similar items in EconPapers)
Date: 2025
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