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Racial Inequality and Redistribution in Post-Apartheid South Africa

Author

Listed:
  • Léo Czajka

    (EU Tax Observatory – Paris School of Economics)

  • Amory Gethin

    (World Bank and Paris School of Economics – World Inequality Lab)

Abstract

We study post-Apartheid inequality dynamics in South Africa using a new microdatabase that combines survey, tax, national accounts, and budget data from 1993 to 2019. Until 2005, pretax inequality rose, racial disparities widened, and redistribution stagnated. Thereafter, pretax inequality fell back toward its 1993 level, while major expansions in tax-and-transfer progressivity sharply reduced posttax inequality. Rapid growth of top Black incomes contributed to halving the White-to-Black pretax income ratio and shifted 20% of taxes from Whites to top Black earners. Despite reaching its lowest point in history in 2019, the racial gap remains extreme by international standards, even after redistribution.

Suggested Citation

  • Léo Czajka & Amory Gethin, 2025. "Racial Inequality and Redistribution in Post-Apartheid South Africa," Working Papers 040, EU Tax Observatory.
    • Handle: RePEc:dbp:wpaper:040
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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