Intergenerational Educational Mobility and Black Tax in South Africa

The paper examines how Black Tax is associated with intergenerational educational mobility in South Africa. We use the National Income Dynamics Study and measure Black Tax as the share of annual household income remitted to extended family members. Upward mobility is defined as completing secondary school when one’s parents did not. Our results show a non-linear relationship. At low and moderate levels of Black tax, Black Tax is positively associated with upward mobility. This pattern is consistent with inter-household transfers acting as informal insurance and family support within kinship networks. At higher levels, the association turns negative, suggesting that larger obligations may limit resources available for children’s education. The turning point is lower among poorer households, especially Black South African households in the bottom 40\% of the income distribution. These findings show that Black Tax can support or constrain educational mobility across generations, depending on the size of the obligation.