Drivers of Inequality in South Africa

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Show simple item record Hundenborn, Janina Woolard, Ingrid Leibbrandt, Murray 2016-11-15T12:19:52Z 2016-11-15T12:19:52Z 2016-11
dc.identifier.citation Hundenborn, J., Leibbrandt, M., Woolard, I. (2016). Drivers of Inequality in South Africa. A Southern Africa Labour and Development Research Unit Working Paper Number 194/NIDS Discussion Paper 2016/16. Cape Town: SALDRU, University of Cape Town
dc.identifier.isbn 978-1-928281-55-9
dc.description.abstract The first democratic elections in 1994 brought about the promise for equal opportunity and an overall improvement of living standards for the majority of the South African population. The newly elected government promised to combat high levels of poverty as well as inequality inherited from the apartheid regime. However, 20 years after the democratization of South Africa, levels of inequality remain stubbornly high. Therefore, this paper analyzes the role of income from different sources in order to investigate which one(s) continue to drive those high levels of inequality. We use data from the 1993 Project for Statistics on Living Standards and Development (PSLSD) to present a detailed snapshot of the level and texture of inequality that was prevalent at the end of the apartheid regime. Furthermore, we use recent data from the National Income Dynamics Study (NIDS) from 2008 and 2014 to assess the role of different income sources in overall inequality and compare these contemporary snapshots to the results from 1993. We do so by applying two different decomposition methods to inequality measured by the Gini coefficient. The first is static, explaining the role of income sources in driving income inequality at each of the three points in time. The second is dynamic, explaining the role of changing income sources in changes in income inequality over time. We find that over the past 20 years, labour income has been the major contributor to overall inequality. The results indicate that a drop in inequality from labour market sources led to a decrease in overall income inequality. A more nuanced decomposition technique within the dynamic decomposition allows us to extract the effect of changes in household demographics on inequality from these results. This shows that when factors of household composition are accounted for, changes in all of the different income sources have led to a decrease in inequality between 2008 and 2014 in particular and over the entire post‐apartheid period in general. en_US
dc.description.sponsorship Acknowledgments: This publication has been produced with the nancial assistance of the Programme to Support Pro-Poor Policy Development (PSPPD), located in the Department of Planning, Monitoring and Evaluation (DPME), and is a product of the strategic partnership between South African government and the European Union. The content of this publication can in no way be taken to reflect the views of the DPME or the European Union. en_US
dc.language.iso en en_US
dc.relation.ispartofseries Saldru Working Paper;194
dc.subject income distribution en_US
dc.subject South Africa en_US
dc.subject inequality drivers en_US
dc.subject labour markets en_US
dc.title Drivers of Inequality in South Africa en_US
dc.type Working Paper en_US

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