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Exclusive Growth? Rapidly Increasing Top Incomes Amid Low National Growth in South Africa

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  • Ihsaan Bassier
  • Ingrid Woolard

Abstract

Despite South Africa’s need for inclusive economic growth, we find that the top income percentiles continue to diverge from the rest of the income distribution. We compare household survey data and tax data (which, unlike household survey data, includes accurate data for the very rich) to investigate the patterns of income growth over the period 2003 to 2018. We find that the gap between the stagnant middle and the top end of the income distribution widened, particularly over the post‐recession period. We also show that the divergence was partly driven by high returns to capital for those with top incomes.

Suggested Citation

  • Ihsaan Bassier & Ingrid Woolard, 2021. "Exclusive Growth? Rapidly Increasing Top Incomes Amid Low National Growth in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 89(2), pages 246-273, June.
  • Handle: RePEc:bla:sajeco:v:89:y:2021:i:2:p:246-273
    DOI: 10.1111/saje.12274
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    Cited by:

    1. Bassier, Ihsaan, 2023. "Firms and inequality when unemployment is high," Journal of Development Economics, Elsevier, vol. 161(C).
    2. Kishan Shah, 2022. "Diagnosing South Africa’s High Unemployment and Low Informality," CID Working Papers 138a, Center for International Development at Harvard University.
    3. Simone Schotte & Rocco Zizzamia & Murray Leibbrandt, 2022. "Snakes and ladders and loaded dice: Poverty dynamics and inequality in South Africa between 2008 and 2017," South African Journal of Economics, Economic Society of South Africa, vol. 90(2), pages 214-242, June.
    4. Andrew Kerr, 2021. "Measuring earnings inequality in South Africa using household survey and administrative tax microdata," WIDER Working Paper Series wp-2021-82, World Institute for Development Economic Research (UNU-WIDER).
    5. Ihsaan Bassier, 2022. "Firms and inequality when unemployment is high," CEP Discussion Papers dp1872, Centre for Economic Performance, LSE.
    6. Chancel, Lucas & Cogneau, Denis & Gethin, Amory & Myczkowski, Alix & Robilliard, Anne-Sophie, 2023. "Income inequality in Africa, 1990–2019: Measurement, patterns, determinants," World Development, Elsevier, vol. 163(C).
    7. Bassier, Ihsaan, 2022. "Firms and inequality when unemployment is high," LSE Research Online Documents on Economics 117999, London School of Economics and Political Science, LSE Library.
    8. Gretha Steenkamp & Nicolene Wesson, 2023. "Do Share Repurchases Crowd Out Internal Investment in South Africa?," IJFS, MDPI, vol. 11(3), pages 1-16, July.

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