Breaking the Poverty and Poor-Health Trap: A Structural Analysis of Informality in South Africa

Julien Albertini, Tony Berthonneau and Anthony Terriau
Additional contact information
Julien Albertini: Université Lumière Lyon 2, Université Jean-Monnet Saint-Etienne, emlyon business school, GATE, 69007, Lyon, France
Tony Berthonneau: Le Mans Université, GAINS-TEPP; Université Lumière Lyon 2, Université Jean-Monnet Saint-Etienne, emlyon business school, GATE, 69007, Lyon, France

No 2607, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Etienne (GATE Lyon St-Etienne), Université de Lyon

Abstract: We study the interplay between informality, health, and education in South Africa. Using data from the National Income Dynamics Study, we document large disparities in health and labor market outcomes over the life cycle. We develop and estimate a life-cycle search-and-matching model with endogenous education and a dual labor market. We show that informal employment and poor health reinforce each other, generating a persistent poverty and poor-health trap. Policy experiments show that the optimal reform combines tertiary education subsidies, a broader tax base, and a lower average tax burden on earnings, increasing employment, welfare, and health while preserving fiscal balance.

Keywords: Informality; Health; Education; Human Capital; Search and Matching (search for similar items in EconPapers)
JEL-codes: I14 J24 J46 J48 J64 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.gate.cnrs.fr/RePEc/2026/2607.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:2607

Access Statistics for this paper

More papers in Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Etienne (GATE Lyon St-Etienne), Université de Lyon Contact information at EDIRC.
Bibliographic data for series maintained by Béatrice HENRY ().