Meritocracy and Inequality in South Africa: Understanding Changes in Beliefs and their Influence on Demand for Redistribution

Twenty-five years after the apartheid regime, South Africa still battles with very high inequality. The country is regarded as one of the most unequal country in the world. The persistent high-income inequality triggers a huge concern about growth inclusivity as well as sustainability. Thus, as the persistent rise in inequality became the centre of recent economic and social research so did the tolerance of inequality. That is, over the years there have been lingering questions about inequality which remain unanswered. One of such questions is the exact relationship between perceived inequality and tolerance of inequality. This paper investigates the effect of perceived inequality on tolerance for inequality in South Africa. While a growing number of studies on actual-tolerated inequality nexus point to a positive relationship, others have observed neutral impacts of inequality on tolerated inequality. Further studies have revealed that, although people tend to reject inequality, the tolerance rate tends to be more in countries with a higher rate of inequality. However, other studies point to a feedback relationship between tolerated inequality and actual inequality. Thus, the relationship between perceived and tolerance of inequality has remained inconclusive. Using the International Social Survey Programme (ISSP) 2009, we investigate the relationship between perceived (measured by actual individual earnings) and tolerated inequality in South Africa. The results provide evidence, which suggests that perceived inequality is positively associated with tolerated inequality in South Africa. This suggests that awareness of prevalence of inequality in society will cause individuals to be unresponsive to more inequality. Our findings hold across a robust battery of robustness checks, including alternative measures of inequality, different samples, and inclusion of appropriate covariates. The results further showed that income influences individual's disposition to inequality tolerance. On education, South Africans tolerate more inequality as they climb higher on the educational ladder. On the location, it emerged that the acceptance of inequality tolerance is not location specific as all locations in South Africa are having strong feeling of delight toward inequality tolerance. Therefore, to help reduce all forms of inequality, we recommend for changes in the distribution of power, assets, access to education and health, employment opportunities at all levels.

South Africa has historically been ranked as one of the most unequal societies in the world and, while the country has experienced sustained positive economic growth since 1994, the impact of this growth on poverty, and particularly inequality, has been disappointing. Analysis using data from the 1995 and 2000 Income and Expenditure Surveys has found, for example, a significant increase in income inequality over the period and, further, that this increase in inequality eroded any significant poverty-reduction gains from higher economic growth. The release of the Income and Expenditure Survey 2005 enables us to examine changes in inequality over the decade between 1995 and 2005. Some preliminary analysis, however, shows a further increase in inequality over the second half of the period. This new result would possibly suggest that South Africa is now the most consistently unequal economy in the world. Critically, the persistent and increasing levels of inequality have been acting as a constraint ensuring that South Africa’s economic growth results in significant declines in household poverty levels. This study has two main objectives. Firstly, the study aims to identify the drivers of the reproduction of inequality in post-apartheid South Africa. The second objective is to examine what policy levers are available to help mitigate the impact of increased inequality in South Africa. Based on the identification of what is driving the increasing levels of inequality, appropriate policy interventions, including assessing the impact and sustainability of existing policies such as the increased provision of social grants, will be evaluated. We find that not only has income inequality remained high for the period under review, but it has also increased significantly between 1995 and 2005. Throughout the time period wage inequality has been the main contributor to the growing income inequality. For a more holistic representation of inequality, we consider the effect of increased public and private assets on non-income inequality. We find that there has been a universal decrease in non-income inequality in South Africa. We also find that the effect of income inequality has been to dampen growth, specifically pro-poor growth. While we found that social transfers have little effect on income inequality when we decomposed the various sources of income, when grant income is excluded as a source of income from total income we find that it is an extremely important supportive source of income and without it many households would experience negative income growth.

South Africa has historically been ranked as one of the most unequal societies in the world and, while the country has experienced sustained positive economic growth since 1994, the impact of this growth on poverty, and particularly inequality, has been disappointing. Analysis using data from the 1995 and 2000 Income and Expenditure Surveys has found, for example, a significant increase in income inequality over the period and, further, that this increase in inequality eroded any significant poverty-reduction gains from higher economic growth. The release of the Income and Expenditure Survey 2005 enables us to examine changes in inequality over the decade between 1995 and 2005. Some preliminary analysis, however, shows a further increase in inequality over the second half of the period. This new result would possibly suggest that South Africa is now the most consistently unequal economy in the world. Critically, the persistent and increasing levels of inequality have been acting as a constraint ensuring that South Africa’s economic growth results in significant declines in household poverty levels. This study has two main objectives. Firstly, the study aims to identify the drivers of the reproduction of inequality in post-apartheid South Africa. The second objective is to examine what policy levers are available to help mitigate the impact of increased inequality in South Africa. Based on the identification of what is driving the increasing levels of inequality, appropriate policy interventions, including assessing the impact and sustainability of existing policies such as the increased provision of social grants, will be evaluated. We find that not only has income inequality remained high for the period under review, but it has also increased significantly between 1995 and 2005. Throughout the time period wage inequality has been the main contributor to the growing income inequality. For a more holistic representation of inequality, we consider the effect of increased public and private assets on non-income inequality. We find that there has been a universal decrease in non-income inequality in South Africa. We also find that the effect of income inequality has been to dampen growth, specifically pro-poor growth. While we found that social transfers have little effect on income inequality when we decomposed the various sources of income, when grant income is excluded as a source of income from total income we find that it is an extremely important supportive source of income and without it many households would experience negative income growth.

South Africa is regarded as one of the most unequal societies in the world. Apartheid engineered a population with vast inequalities across racial groups. The nature of this inequality was primarily racially based. The political and economic trajectory of the last twenty years has somewhat changed the nature and composition of this kind of inequality but fundamental continuity of deep inequality is still somehow maintained. The post-apartheid distributional regime continues to divide South Africans into insiders and outsiders. Although the political pattern is still largely racially based, a new political landscape is beginning to emerge which is based on the complexity of class and race entanglements. The rising inequality within the black community is becoming a cause for concern for the continuation of the present developmental trajectory. It has created a fertile ground for the rise of populist movements and demagogues that will seek to take advantage of those neglected by the state machinery. This paper will seek to explore the links between inequality and economic growth and political conflict by tracing the origins of income inequality in South Africa, its evolution after the democratic transition in 1994; and its economic and political implications.

The jury is out and the verdict is in, according to most leftist commentators on the African National Congress (ANC) government. The South African political leadership has forgotten its institution...

Human capital (HC) has increasingly been identified as a driver of economic development, with the potential to reduce income inequality, which, in South Africa, originates in the labour market. HC is, however, a complex concept to measure. This study uses Fields’ regression-based decomposition method to analyse the relationships between income inequality and HC in South Africa. The Fields method allows for the analysis of the impact of several factors contributing to HC on the distribution of a measure of income. Data from the National Income Dynamics Study (NIDS) wave 1 (2008) and 5 (2017) are used. The findings suggest that increasing educational attainment, through improved school quality for all, would likely play a key role in reducing income inequality in South Africa. Furthermore, the large role of education attainment in explaining household income inequality supports the use of education attainment as a proxy for HC in South Africa.

The study investigates the nexus between income inequality and crime in the two provinces of Eastern Cape and KwaZulu-Natal in South Africa. The study adopted a qualitative research approach, which combines both primary and secondary data sources, including interviews with nine participants and consultation with academic journals, monographs and reports, respectively. Thematic data analysis was utilised to analyse the participants' insights. The theoretical frameworks are relative deprivation theory and economic theory of crime. Inequality breeds social jealousy in societies and seemingly culminates in crime. The findings of this study revealed that the country’s history coated in apartheid and other factors are responsible for the high income inequality in South Africa, which in turn is a major factor influencing crime in the country. It recommended that through good leadership by the political class, objective anti-corruption drive and provision of infrastructure, the private sector would thrive so that they can provide more jobs. The study also recommended that good education and skill acquisition to promote the entrepreneurship capacity and employability of youths should be promoted.

This paper uses various decomposition techniques to understand the nature of household inequality in contemporary South Africa. It examines, firstly, the importance of race in overall inequality; secondly, the contribution of major income sources to national inequality; and thirdly, the relationship between inequality, poverty and the labour market. Within-race inequality is also high with intra-African inequality being highest. The paper also shows the importance of differential access to wage income in driving household income inequality in South Africa. Gauteng, South Africa's economic powerhouse, has long been dependent on immigration to supply its labour requirements, a phenomenon deeply rooted in the provinces early economic history and the development of mining and heavy industry. South African immigrants to the province (or in-migrants) were defined in one of two ways: individuals who were born in South Africa, but outside of Gauteng, or individuals whose most recent move in the 1996-2001 period was to Gauteng from one of the other eight provinces. In-migrants are described in terms of their demographics and educational and employment status. Further, in-migrants access to public services including electricity and water and other indicators of their living standards, such as housing, were analysed. As far as possible, the analysis compared in-migrants to non-migrants and intra-Gauteng migrants in order to provide insight into special benefits or challenges that in-migrant households may present. The Labour Force Survey module on migrant labour allowed the profiling of migrant labourers and the approximation of economic links between Gauteng and other provinces as represented by remittances. The study found that a large proportion of Gauteng residents were born outside the province, or moved into the province in the inter-census period, indicating a relatively mobile population.

This paper examines the role of democracy on poverty and intergenerational inequality in South Africa. The authors used secondary data and published literature to unpack the nexus of the problem, and to further broaden understanding of democracy, intergenerational inequality, and poverty in South Africa. The authors establish that unemployment, lack of property ownership and a poor educational system are the main contributors to poverty and intergenerational inequality in South Africa. However, we found that the government’s propoor policies have not adequately addressed the problems. As recommendations, this paper submits that it is essential to increase the redistribution of assets, especially land, to allow land ownership by the poor, which will open many other economic opportunities, such as access to capital. Also, government policies need to be revisited for quality job creation, closing the unemployment gap in the market.

Editorial: South Africa's Emergent 'Social Indicators Movement' V. Moller. The Shape of South African Society and its Challenges L. Schlemmer, V. Moller. Poverty, Inequality and Deprivation in South Africa: An Analysis of the 1993 Saldru Survey S. Klasen. 'A Difficult Life': The Perceptions and Experience of Poverty in South Africa J. May, A. Norton. Inequality in South Africa: Findings from the 1994 October Household Survey R. Hirschowitz, M. Orkin. Surviving the Transition: Trends and Perceptions of Crime in South Africa A. Louw. Trauma and Mental Health in South Africa R. Hirschowitz, M. Orkin. The Reconstruction and Development Programme: Success or Failure? C.K. Corder. Personal versus Collective Quality of Life and South Africans'Evaluations of Democratic Government R. Mattes, J. Christie. Aspect of the Quality of Life in Black Townships in a South African City: Implications for Human Development E. Beukes, A. van der Colff. Playing Numbers or Politics? Approaches to the Prioritisation of Development Needs in South Africa P. Gill, P. Hall. Monitoring Optimism in South Africa M. Harris. Index of Authors Volume 41, 1997.

Bringing existing inequality in South Africa (high) and Switzerland (low) to the lab, we study how people's preferences for redistribution change with the level of income inequality, income mobility, uncertainty of initial income positions, source of income (random or based on real-effort). We find that uncertainty and overconfidence undermine demand for redistribution. The effect magnifies with larger income disparity (South Africa). It further induces a reverse POUM effect: since wealth ambitions of rich aspirants are better preserved under low than under high mobility, demand for redistribution grows with the degree of mobility. These results combined propose an inequality trap: today's inequality favors income overestimation, winding up less demand for redistribution with less mobility, which propels advanced inequality tomorrow.

Questions relating to the causes and responses to spatial inequalities are attracting renewed international focus. Uncertainty exists in South Africa as to appropriate responses to persistent and deep-rooted spatial inequalities in the country. This article analyses international research into patterns and causes of spatial inequality to inform policy debates on addressing spatial inequality in contemporary South Africa.

Reviewed by: Fighting Poverty: labour markets and inequality in South Africa Benjamin J Roberts (bio) Haroon Bhorat, Murray Leibbrandt, Muzi Maziya, Servaas van der Berg and Ingrid Woolard (eds) (2001) Fighting Poverty: labour markets and inequality in South Africa. Cape Town: UCT Press. Bhorat et al's book, Fighting Poverty, represents a timely and welcome contribution to the burgeoning literature documenting the extent and nature of poverty and inequality in South Africa that has emerged over the past decade. Its publication occurs at a time when there is much public concern over the rising incidence, depth and severity of poverty. This is evident at the level of the state, as indicated by the government's commitment to eradicating poverty and underdevelopment by means of, for example, its commitment to the Millennium Development Goals and the New Partnership for Africa's Development (NEPAD). It is also a critical issue amongst civil society, as reflected by the Speak Out on Poverty Hearings (1998) and the War on Poverty declaration. It is also worthwhile mentioning that the book's release comes on the eve of the 20th anniversary of the Second Carnegie Inquiry into Poverty and Development, which in the words of the authors themselves represented 'a daunting benchmark of the mountain that had to be climbed' (2001:15), especially in terms of the enormity of the country's poverty and inequality challenge. The book's focus on the intersections between labour markets, poverty and inequality is also germane given rising unemployment trends and the continued decline in formal sector employment growth in spite of government's anti-poverty strategies, including the Poverty Alleviation Fund, Integrated Rural Development Programme and Public Works Programmes (Department of Social Development 2002, Aliber 2002). [End Page 105] This book, which is based on a collection of working papers (some of which were published elsewhere earlier), provides an excellent account of the relationship between poverty, inequality and labour markets in South Africa. The study's genesis dates back to the African Economic Research Consortium's (AERC) training workshop on Poverty, Inequality and Labour Markets held in Kampala in August 1997. The country study, which was jointly funded by the AERC and the South African Department of Labour, partly involved the twinning of the research team with an international researcher and university, in this instance Gary Fields of Cornell University. This collaboration exposed the authors to a range of eminent labour and development economists, which resulted in an awareness of the limitations of the South African literature and the prospects for the application of various 'new' techniques. The circumstances surrounding the book's creation and publication has meant that it has an appeal not only to students and academics interested in the field being studied, but that it also has immediate relevance to policy makers. The overarching purpose of the book is to: make a contribution to the analysis of poverty and inequality in South Africa by addressing four major issues that are pertinent to this policy milieu, namely: household inequality and poverty; vulnerability in the South African labour market; labour market participation and household poverty; and labour market and social policy interventions. (2001:16) The structure of the book is arranged according to these four research themes. The initial section, comprising Chapters 1 and 2, attempts to develop a deeper understanding of the nature of household-level inequality, with specific reference to the labour market, and construct a profile of poverty in contemporary South Africa. In so doing, the authors have sought to complement existing descriptive research on poverty and inequality with a clear but methodologically rigorous approach. This is achieved partly by applying recently developed techniques in poverty and inequality decomposition analysis to several nationally representative data sets. For instance, in the inequality chapter, various categorical decomposition techniques (Theil-T, Theil-L and Atkinson measure) are employed, allowing for an in-depth exploration of the racial dimensions of South African inequality, in particular the relative importance of inequality between the different race groups on the one hand and inequality within race groups on the other. The authors additionally conduct income source analysis, a form of decomposition analysis that exposes the income sources that dominate [End Page...

This work is an anlaysis of economic relations in South Africa. It analyses the work of numerous historians on inequality and exploitation in South Africa around a single theme: the systematic and progressive economic exploitation of indigenous people by settler groups. Second, the author argues that, despite South Africa's transition to democracy, its society is as unequal - if not more so - than before. He claims that in the early 1990s, parallel to the constitutional negotations, a series of informal negotations and interchanges took place behind the scenes during which the local corporate sector, backed by powerful international financial institutions, made a concerted effort to sell unfettered to ANC leaders. This attempt succeeded, resulting in the ANC replacing the RDP with GEAR. The situation of the vast majority of blacks has in fact worsened since the transition to democracy. For this reason, he considers that South Africa's transformation is incomplete. Sampie Terreblanche criticizes the corporate sector for its ruthless pursuit and protection of its own interests, to the detriment of broader South African society. He also criticizes the new black elite for its materialism and apparent indifference to the plight of the poor. In a final chapter, he argues that the current system of neo-liberal democratic capitalism is inappropriate to a developing country such as South Africa. He calls for a policy shift towards social democracy in which the state should play a more active role in alleviating poverty, redistributing wealth, and attending to social welfare.

We analyse the long‐term trends in wage inequality in South Africa, using household survey data. We show that the trends in household income inequality are largely driven by changes in wage inequality. Given the detailed nature of our series we show that measurement issues and breaks in the series need to be dealt with in order to draw robust conclusions from the data. Most standard inequality measures show that wage inequality has increased over the period. Nevertheless the choice of measure matters, because there are different trends in different parts of the distribution. It appears that the distribution below the median has become more compressed, while the top of the wage distribution has moved away from the median. The inequality in the labour market translates into even higher inequality in society given that high earners tend to live together with other high earners while low wage individuals often end up sharing their incomes with the unemployed. Furthermore there are many South Africans with access to no wage income. Given the trends analysed here it is not surprising that overall inequality in South Africa has not come down or has even increased since the end of apartheid.