The influence of employment and occupation on a household's net equity

Abstract

Many South Africans are faced with the reality of poverty. Studies have shown that one of the best ways to alleviate poverty is through employment. Considering South Africa’s high unemployment rate, it is clear that unemployment contributes to poverty and low household net wealth. Using data obtained from a representative omnibus sample, this paper analysed the effect of employment status on a household’s net equity (assets minus liabilities). Whilst being employed did statistically significantly influence the household’s net equity, there was an almost equal distribution of households over the net equity quintiles, indicating that employment status alone is not a guarantee of economic emancipation. In order to determine the cause of the equal distribution, the paper investigated whether the occupation in which a person is employed might assist in explaining the differences in the net equity values. It was found that being employed in certain occupations did to a statistically significant degree explain the differences in the net equity of households, with the households of persons employed in scarce skills occupations, on average, having a significantly higher net equity than the households of persons employed in a non-scarce skills occupation.

Keywords

• Household
• net equity
• net wealth
• employment status
• occupation
• South Africa
• scarce skills
• non-scarce skills