One of the biggest factors that contribute to persistent income inequality is race and
institutions and policies based on segregation and discrimination in the past (cite). Apartheid
was extremely biased towards white people, it allowed them to have access to health care and
education which further allowed them to gain capital and increase their wealth, this was done
at the detriment of the black majority who were denied opportunities to accumulate wealth
and capital. policies such as job reservation which reserved certain jobs and practices only for
whites allowed white people to gain more wealth while policies such as influx control, group
areas act and inferior education hindered the progress of black South Africans as well as other
non-white South Africans. This would then lead to intergenerational and persistent inequality
since future generations of white South Africans would already have an upper hand and
endowment that provides them with more income as time goes on as compared to black South
Africans. Since apartheid ended there have have been policies in place to mitigate the high
levels of ineqaulity between race groups such as BBBEE. These polcies have been able to
reduce inquality but not at a significant level since South Africa still remains a country with one
of the highest inequality rates (cite).
Moreover, currently labor market income is a driving factor in persistent inequality. Labour
Market income contributes the largest income to total household income from all income
sources. Its contributions to income inequality have increased between 1995 and 2005. One of
the reasons for this is labor market mismatch. There has been a structural change in the South
African economy, shifting away from primary and secondary sectors towards the tertiary
sector(cite). Therefore there is greater demand for skilled workers whereas the majority of
supplied labor is unskilled. Moreover since the end of apartheid there has been an increase in
labor force participation however insufficient employment opportunities have been created
therefore leading to increasing levels unemployment. –EXPAND ON POINTS MADE HERE
Categorical inequality also plays a role in the persistent and intergenerational inequality
experienced in South Africa. This includes inequalities between different groups of people
rather than individuals such as race gender, place of residence, etc. it is usually inherited
circumstances. Many people in South Africa will struggle to find economic success because of
circumstances that they are born into this will then lead to a cycle of intergenerational
inequality. Someone born into poverty whose parents don’t have university degrees will have a
lot less opportunities compared to someone whose parents both have degrees and good
careers. Intergenerational mobility is linked with parental background. Data on race and
parental attributes account for 47.7% of overall inequality in South Africa. Spatail inequality is
another catergorical inequality that leads to persistent ineqaulity. Consumption is significantly
lower in rural areas compared to urban areas. Moroever economic activity tends to take place
in urban areas, this secludes those who live in rural areas from participating in economic
activity thus leaving many unemployed for reasons such as costly transport expenditure. This
perpetuates persistent inquality since many born in that area would have kids in that area who
will struggle with the same problems thus limiting intergenerational mobility. More affluent
areas will experience better healthcare, education, recreactinal ficilities, etc which will all play a
role in the overall development and well being of individuals and therefore success in the
economic productivity(cite).
https://repository.hsrc.ac.za/bitstream/handle/20.500.11910/8690/2166.pdf?sequence=1
https://repository.hsrc.ac.za/bitstream/handle/20.500.11910/8690/2166.pdf?sequence=1
https://www.econstor.eu/bitstream/10419/211200/1/1043725660.pdf
https://deliverypdf.ssrn.com/delivery.php?ID=622087009029071097111013065029000024022
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https://www.un-ilibrary.org/content/books/9789210607100s004-c003/read
https://oxfamilibrary.openrepository.com/bitstream/handle/10546/322516/rr-inequalitysouth-africa-010714-en.pdf?sequence=1
https://opensaldru.uct.ac.za/bitstream/handle/11090/853/2016_194_Saldruwp.pdf?sequence
=3
https://www.opensaldru.uct.ac.za/bitstream/handle/11090/1003/2021_275_Saldruwp.pdf?seq
uence=3
“Education is a driver of ineqaulity”
Intergenerational Inequality
The unequal distribution of assets, notably education, health and housing persists across time and
across generations (Pellicer et al., 2011; Pellicer & Ranchhod 2016; Spaull & Jansen 2019; Lundberg &
Startz, 1998). These traps reproduce inequalities and also condition the lives of future generations in the
country. The lack of intergenerational mobility, and its precariousness and vulnerability provide a telling
lens to describe the reproduction of inequality in South Africa.
parental attributes suggest that inequality of opportunity explains as much as 47.7 percent of overall
inequality in consumption per capita in the country (Figure 2.1). An earlier study found inequality of
opportunity to contribute around 45 percent to overall inequality (World Bank 2018a). Even relative to other
highly unequal upper-middle- income countries, such as Brazil and Colombia, inequality of opportunity in
South Africa is exceptional, both in absolute terms and as a share of total inequality. Breaking this cycle would
require the country to equalize opportunities and to reduce the disadvantages people face because of their
circumstances at birth