The Post-Apartheid Evolution of Earnings Inequality in South Africa, 1995-2004
This paper examines the trend in post-Apartheid earnings inequality in South Africa. By combining data sets, the paper is able to analyze the trend for the whole period 1995-2004. Earnings inequality rose sharply during 1995-1999 and then declined marginally, but remained high, during 2000-2004. A dramatic rise in unemployment was the driving force in exacerbating earnings inequality in the 1990s. Unemployment began to level off in the 2000s but remained at a high rate. An unprecedented influx of new entrants into the formal labour market in the 1990s put downward pressure on average real wages, affecting workers both in the middle of the distribution and toward the bottom. The growth of the South African economy has been neither rapid enough nor employment-intensive enough to absorb such a large influx of workers. Moreover, the economy?s greater openness to trade and financial flows appears to have left many workers behind, especially Africans, workers in low-skilled occupations, residents of rural areas in general and poor regions in particular. Earnings inequality remains high across groupings of workers differentiated by race, education and occupation although occupation has become a more important factor than the other two in the 2000s. Differentials across the mean earnings of workers classified by rural and urban residence and by province have also intensified. In the 1990s, inequalities within groupings of worker rose sharply and then moderated by the 2000s. While earnings differentials by race and the rural-urban divide also exacerbated inequality in the 1990s, they have been in modest decline since then. These changes in the dynamics of earnings inequality between the 1990s and 2000s pose new challenges for South African policymakers in their efforts to substantially reduce the Apartheid legacy of high inequality and poverty.
|Date of creation:||Oct 2006|
|Date of revision:|
|Publication status:||Published by UNDP - International Poverty Centre, October 2006, pages 1-34|
|Contact details of provider:|| Web page: http://www.ipc-undp.org|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
- Blejer, Mario I & Guerrero, Isabel, 1990. "The Impact of Macroeconomic Policies on Income Distribution: An Empirical Study of the Philippines," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 414-23, August.
- Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
- Gaurav Datt & Martin Ravallion, 1998.
"Farm productivity and rural poverty in India,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 34(4), pages 62-85.
- Dollar, David & Kraay, Aart, 2001.
"Growth is good for the poor,"
Policy Research Working Paper Series
2587, The World Bank.
- Easterly, William & Fischer, Stanley, 2001.
"Inflation and the Poor,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 33(2), pages 160-78, May.
- Branko Milanovic, 2005.
"Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys,"
World Bank Economic Review,
World Bank Group, vol. 19(1), pages 21-44.
- Branko Milanovic, 2003. "Can We Discern The Effect Of Globalization On Income Distribution? Evidence From Household Surveys," HEW 0310002, EconWPA.
- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
- Jean-Pierre Cling & Philippe De Vreyer & Mireille Razafindrakoto & François Roubaud, 2003. "La croissance ne suffit pas pour réduire la pauvreté : le rôle des inégalités," Working Papers DT/2003/04, DIAL (Développement, Institutions et Mondialisation).
- Bhorat, Haroon & Kanbur, Ravi, 2006.
"Poverty and Well-being in Post-Apartheid South Africa: An Overview of Data, Outcomes and Policy,"
127035, Cornell University, Department of Applied Economics and Management.
- Haroon Bhorat & Ravi Kanbur, 2005. "Poverty and Well-being in Post-Apartheid South Africa: An Overview of Data, Outcomes and Policy," Working Papers 05101, University of Cape Town, Development Policy Research Unit.
- Milanovic, Branko, 1998. "Explaining the increase in inequality during the transition," Policy Research Working Paper Series 1935, The World Bank.
- Demombynes, Gabriel & Ozler, Berk, 2005.
"Crime and local inequality in South Africa,"
Journal of Development Economics,
Elsevier, vol. 76(2), pages 265-292, April.
- repec:fth:oxesaf:99-12 is not listed on IDEAS
- Geeta Kingdon & John Knight, 1999.
"Unemployment and wages in South Africa: a spatial approach,"
Economics Series Working Papers
WPS/1999-12, University of Oxford, Department of Economics.
- Geeta G. Kingdon & John B. Knight, 1999. "Unemployment and wages in South Africa: A spatial approach," CSAE Working Paper Series 1999-12, Centre for the Study of African Economies, University of Oxford.
- Haroon Bhorat, 2004. "Labour Market Challenges In The Post-Apartheid South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 72(5), pages 940-977, December.
When requesting a correction, please mention this item's handle: RePEc:ipc:wpaper:32. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andre Lyra)
If references are entirely missing, you can add them using this form.