Determinants of the Evolution of Inequality in Africa

Abstract

Most African countries inherited a dual economic structure and high levels of inequality from the colonial times, and inequality has remained high since independence. The pattern of structural change in Africa has implied a shift of labour out of agriculture, but since the movers have mostly been absorbed into low-paying, often informal activities, this transformation has not led to a significantly lower overall inequality. A change of the structure of the economy leading to an expansion of better-paying jobs requires higher rates of investment.