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Incomes in South Africa since the fall of Apartheid

Author

Listed:
  • Murray Leibbrandt

    (University of Cape Town)

  • James Levinsohn

    (University of Michigan, National Bureau of Economic Research)

  • Justin McCrary

    (University of Michigan)

Abstract

This paper examines changes in individual real incomes in South Africa between 1995 and 2000. We document substantial declines—on 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 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

  • Murray Leibbrandt & James Levinsohn & Justin McCrary, 2005. "Incomes in South Africa since the fall of Apartheid," Working Papers 536, Research Seminar in International Economics, University of Michigan.
  • Handle: RePEc:mie:wpaper:536
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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