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Incomes in South Africa after the Fall of Apartheid


  • Leibbrandt Murray

    (University of Cape Town)

  • Levinsohn James A

    (Yale University)

  • McCrary Justin

    (University of California, Berkeley)


This paper examines changes in individual real incomes in South Africa between 1995 and 2000. We document substantial declineson the order of 40%in real incomes for both men and women. The brunt of the income decline appears to have been shouldered by the young and the non-White. We extend nonparametric methodologies to examine the role of changes in endowments, returns to these endowments and selection into and out of positive incomes as possible explanations for this income change. We argue that changes in respondent attributes are insufficient to explain this decline. For most groups, a (conservative) correction for selection into income recipiency explains some, but not all, of the income decline. For other groups, selection is a potential explanation for the income decline. Perhaps the most persuasive explanation of the evidence is substantial economic restructuring of the South African economy in which wages are not bid up to keep pace with price changes due to a differentially slack labor market.

Suggested Citation

  • Leibbrandt Murray & Levinsohn James A & McCrary Justin, 2010. "Incomes in South Africa after the Fall of Apartheid," Journal of Globalization and Development, De Gruyter, vol. 1(1), pages 1-62, January.
  • Handle: RePEc:bpj:globdv:v:1:y:2010:i:1:n:2

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    References listed on IDEAS

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    2. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    3. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
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    7. Cally Ardington & David Lam & Murray Leibbrandt & Matthew Welch, 2005. "The Sensitivity of Estimates of Post-Apartheid Changes in South African Poverty and Inequality to key Data Imputations," SALDRU/CSSR Working Papers 106, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Thomas Lemieux, 2002. "Decomposing changes in wage distributions: a unified approach," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 646-688, November.
    9. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
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    Cited by:

    1. Carrillo, Paul E. & Pope, Jaren C., 2012. "Are homes hot or cold potatoes? The distribution of marketing time in the housing market," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 189-197.
    2. Miquel Pellicer & Vimal Ranchhod & Mare Sarr & Eva Wegner, 2011. "Inequality Traps in South Africa: An overview and research agenda," SALDRU Working Papers 57, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Afridi, Farzana & Dinkelman, Taryn & Mahajan, Kanika, 2016. "Why Are Fewer Married Women Joining the Work Force in India? A Decomposition Analysis over Two Decades," IZA Discussion Papers 9722, Institute for the Study of Labor (IZA).
    4. Pan, Yao, 2016. "Understanding the rural and urban household saving rise in China," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 46-59.

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