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Education and Inequality: The South African Case

Author

Listed:
  • Nicola Branson

    () (SALDRU, School of Economics, University of Cape Town)

  • Julia Garlick
  • David Lam
  • Murray Leibbrandt

    () (SALDRU, School of Economics, University of Cape Town)

Abstract

Following the international literature, income inequality decompositions on data from contemporary South Africa show that the labour market is the key driver of overall household inequality. In order to understand one of the channels driving this labour market inequality, we use national household survey data to review changing returns to education in the South African labour market over the last 15 years; with a focus on both the returns to getting employment as well as the earnings returns for those that have employment. We show that South Africa has experienced a skills twist with the returns to matric and post-secondary education rising and the returns to levels of education below this remaining constant. Then, based on a regression based decomposition of earnings inequality, we show how this has impacted earnings inequality. Indeed, the increase in returns to post-secondary education has directly counteracted the equalising gains that have been made by increased educational attainment, resulting in consistent levels of inequality over time.

Suggested Citation

  • Nicola Branson & Julia Garlick & David Lam & Murray Leibbrandt, 2012. "Education and Inequality: The South African Case," SALDRU Working Papers 75, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:75
    as

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    References listed on IDEAS

    as
    1. Lam, David & Ardington, Cally & Leibbrandt, Murray, 2011. "Schooling as a lottery: Racial differences in school advancement in urban South Africa," Journal of Development Economics, Elsevier, vol. 95(2), pages 121-136, July.
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    3. 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.
    4. David Lam & Cally Ardington & Nicola Branson & Murray Leibbrandt, 2013. "Credit Constraints and the Racial Gap in Post-Secondary Education in South Africa," NBER Working Papers 19607, National Bureau of Economic Research, Inc.
    5. Servaas van der Berg, 2007. "Apartheid's Enduring Legacy: Inequalities in Education-super- 1," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(5), pages 849-880, November.
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    7. James Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explanations With A Dynamic General Equilibrium Model of Labor Earnings With Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 1-58, January.
    8. Tregenna, F., 2009. "The Relationship Between Unemployment and Earnings Inequality in South Africa," Cambridge Working Papers in Economics 0907, Faculty of Economics, University of Cambridge.
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    Cited by:

    1. Mussa, Richard, 2017. "Early-Life Rainfall Shocks and Intergenerational Education Mobility in Malawi," MPRA Paper 75978, University Library of Munich, Germany.
    2. Kwenda, Prudence & Benhura, Miracle, 2015. "A Detailed Decomposition Analysis of the Public-Private Sector Wage Gap in South Africa," IZA Discussion Papers 9271, Institute for the Study of Labor (IZA).
    3. Miracle Ntuli & Prudence Kwenda, 2013. "Labour Unions and Wage Inequality Among African Men in South Africa," Working Papers 13159, University of Cape Town, Development Policy Research Unit.
    4. Atika Pasha, 2016. "Impact of Cash Grants on Multidimensional Poverty in South Africa," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 208, Courant Research Centre PEG.
    5. Magejo, Prudence & Benhura, Miracle & Gwatidzo, Tendai, 2014. "Trends in the Intergenerational Transmission of Education among Black South Africans," IZA Discussion Papers 8546, Institute for the Study of Labor (IZA).
    6. Nicola Branson & Clare Hofmeyr & David Lam, 2014. "Progress through school and the determinants of school dropout in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 31(1), pages 106-126, January.
    7. Stephen Taylor & Patricia Watson, 2015. "The impact of study guides on “matric” performance: Evidence from a randomised experiment," Working Papers 13/2015, Stellenbosch University, Department of Economics.
    8. Marisa Coetzee, 2014. "School quality and the performance of disadvantaged learners in South Africa," Working Papers 22/2014, Stellenbosch University, Department of Economics.

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