Who You Live With Matters: Household Sorting and Gendered Inequality in South Africa

Household income reflects not only individual earnings but also who lives together and how resources are pooled. In South Africa, where household structures are fluid and multigenerational co-residence is common, changes in membership can substantially alter living standards. Yet most inequality research treats household composition as background rather than as an allocative mechanism. Using panel data from the National Income Dynamics Study, this paper makes a novel contribution to the literature by decomposing real adult-equivalent household income into individual and household-lineage components within a two-way fixed effects framework. Focusing on entrants—individuals who switch household lineages—the analysis isolates sorting into new resource environments. The results show that men systematically enter households with higher income premia than women, often by 15–25 percent across demographic groups, while wellbeing differences are smaller and more heterogeneous. The findings demonstrate that differential access to household resource environments at transition constitutes an important and underappreciated mechanism of gendered inequality. Journal of Economic Literature (JEL) Codes D31; J12; O15