Inequality In South Africa Research Articles

An Econometric Analysis on the Relationship between Globalisation and Inequality in South Africa

Globalisation has had an unprecedented impact on the development and well-being of societies across the globe. Whilst the process has been lauded for bringing about greater trade specialisation and factor mobility many have also come to raise concerns on its impact in the distribution of resources. For South Africa in particular this has been somewhat of a contentious issue given the country's controversial past and idiosyncratic socio-economic structure. Since 1994 though, considerable progress towards its global integration has been made, however this has largely coincided with the establishment of, arguably, the highest levels of income inequality the world has ever seen. This all has raised several questions as to whether a more financially open and technologically integrated economy has induced greater within-country inequality (WCI). This study therefore has the objective to analyse the impact of the various dimensions of globalisation (economic, social and political) on inequality in South Africa. Secondary annual time series from 1990 to 2018 were used sourced from the World Bank Development indicators database, KOF Swiss Economic Institute and the World Inequality database. By using different measures of inequality (Palma ratios and distribution figures), the study employed two ARDL models to test the long-run relationships with the purpose to ensure the robustness of the results. Likewise, two error correction models (ECM) were used to analyse the short-run dynamics between the variables. As a means of identifying the casual effects between the variables, a Toda-Yamamoto granger causality analysis was utilised. Keywords: ARDL, Inequality, Economic Globalisation; Social Globalisation; South Africa

Politics, Policy, and Inequality in South Africa Under COVID-19

The COVID-19 pandemic has highlighted and exacerbated inequalities in South Africa. The question posed in this article is whether the pandemic and its associated responses offer the opportunity for a more egalitarian society in South Africa, or a more intensively unequal society. The future is contested. On the one hand, there is the consolidation of labor displacement, a growth in unemployment, and a deepening of inequality. On the other, there is the possibility of a turning point toward significant advances in the de-commodification of education, health, and transport. But as with much of the Global South, South Africa has relatively high levels of informality compared to the Global North, which has implications for the impact of the pandemic and the structure of the responses.

An analysis of policies that address income inequality in South Africa

An analysis of policies that address income inequality in South Africa

Developmental Social Work and the Sustainable Development Goals in South Africa: Opportunities and Challenges

The main thrust of this article concerns the potential for the social work profession to contribute to the attainment of the Sustainable Development Goals (SDGs) which overlap with developmental social work, specifically with respect to poverty and inequalities in South Africa. Although developmental social work practice may attempt to tackle the structural causes of poverty and inequality, relatively few studies appear to have been conducted to evaluate the contribution of this approach to attaining SDGs. The article draws from contemporary available literature and documents and the author’s observations pertaining to developmental social work and the role which it can play in attaining SDGs in the context of present-day South Africa. The review revealed the potential for developmental social work to make a meaningful contribution to attaining SDGs and the factors which could continue to hinder developmental social work practice, thereby making it difficult for SDGs.

Gender inequality and the COVID-19 crisis: Evidence from a large national survey during South Africa’s lockdown

We analyse the early effects of the COVID-19 crisis and lockdown in South Africa on women’s and men’s work in the paid and unpaid (care) economies. Because women and men typically have different roles in both spheres, it is likely that they would experience the negative effects of the crisis unevenly, potentially exacerbating existing inequalities. Based on a large national survey conducted during South Africa’s lockdown period, we find that women have been affected disproportionately by the crisis. While women comprised less than half of the employed in February, they experienced two-thirds of the net job losses between February and April, with the most vulnerable groups affected more. Among those who remained in employment, there was a larger fall in working hours among women than men. Compounding these disproportionate effects in the labour market, women also took on more of the additional childcare that resulted following school closures. The crisis has therefore increased gender inequality in South Africa, reversing some of the hard-won gains of the previous 25 years.

Redistribution, inequality, and efficiency with credit constraints: Implications for South Africa

We develop a model that jointly determines the distribution of income and the aggregate macrodynamics. We identify multiple channels through which alternative public policies such as transfers, consumption and income taxes, and public investment will affect the inequality-efficiency trade-off. Income tax and transfers have both a direct income and an indirect substitution effect; a consumption tax has only the latter. We present extensive numerical simulations motivated by the South African National Development Plan 2030, the objective of which is to reduce soaring inequality and increase per capita GDP. Our results illustrate how the judicious combination of social grants and a consumption tax may help achieve these targets. The simulations also suggest that the sharp decline in the private-public capital ratio, coupled with a high degree of complementarity between public and private capital may help explain the persistence of market inequality in South Africa during the last two decades.

Reproduction and convertibility: examining wealth inequalities in South Africa

Inspired by Pierre Bourdieu’s notion of capital convertibility, this article investigates why wealth inequalities in South Africa under the African National Congress have remained so persistently stubborn and how it is possible that the revolutionary movement, ostensibly devoted to the ideals of the Freedom Charter, has not managed to radically improve matters 25 years after the fall of apartheid. Based on a series of interviews conducted with South African academics and members of civil society, the article seeks to provide some answers to this conundrum by tracing the roots of the problem to reproduction mechanisms that are deeply entrenched in the economy of South Africa, its politics and its educational system.

Subjective wellbeing inequality in South Africa 2008–14: An unconditional quantile decomposition analysis

ABSTRACT This study analyses the sources of reduction in subjective wellbeing (SWB) inequality in South Africa over the period 2008–14. The unconditional quantile regression decomposition of mean gap finds differences in the effect of covariates along the SWB distribution, underlining the relevance of going beyond mean-based decomposition. Fall in SWB inequality is due to the increased level of SWB on the left-hand side of the distribution and a reduced level in the upper end of the distribution. Greater access to public amenities such as electricity and flushing toilets among those on the lower SWB distribution and lower returns to relative income and good health among those on the upper SWB spectrum can be said to be the major reasons for decline in SWB inequality. While the trend in returns to race has contributed to lower SWB inequality, employment stands out starkly as increasing inequality through both endowment and coefficient effect.

The Inequality Trap: How High Stakes Fuel Overestimation and Equity Aversion

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.

COVID-19 and Autism Research: Perspectives from Around the Globe.

COVID-19 and Autism Research: Perspectives from Around the Globe.

The role of air transport in employment creation and inclusive growth in the Global South: The case of South Africa

This paper investigates the claim that air transport development may be an engine for inclusive economic growth and poverty reduction in developing and emerging countries, using the example of South Africa, a country with high income inequality and rising air traffic volume. A social accounting matrix (SAM) model is adopted to assess the strengths of backward and forward linkages between the air transport sector and the local economy, and a computable general equilibrium (CGE) model is used to estimate the economy-wide impact of air transport expansion in South Africa. The results show that air transport has a significant effect on output, incomes and employment, and that its importance lies in its considerable backward linkage effects. Income and employment effects are found to be unevenly distributed in the economy, the biggest winners being households in the highest expenditure decile, as well as highly skilled labour. It is concluded that unless accompanied by improvements in education and training for low-skilled workers, air transport expansion may lead to a widening of income inequality in South Africa.

Electricity access and income inequality in South Africa: Evidence from Bayesian and NARDL analyses

Access to modern energy services including electricity is fundamental to fulfilling basic social needs, driving economic growth and fueling human development, hence, the pathway out of poverty to prosperity. This study examined the impact of income level, inequality in the distribution of income and the control of corruption on access to electricity from 1990-2017 in South Africa, using Bayesian and nonlinear autoregressive distributed lag (NARDL) estimation approach. The long-run asymmetric effects of income level reveal a positive impact on electricity access, thus, validating the initial positive symmetric effect. While income inequality has positive effect on accessibility, corruption appears to hinder the roadmap towards achieving energy for all. Even though economic development is crucial to materialize access to electricity, yet, efficient and effective financing and investment climate alone are not enough to warrant energy security, but, right policies, good governance and institutional quality.

Socio-Economic Inequality of Wellbeing: A Comparison of Switzerland and South Africa

The study seeks answers to the broader question on the income-wellbeing nexus through a seldom utilised technique of concentration index to measure income related wellbeing inequality. The analysis is undertaken in the vastly differing income and income inequality contexts of Switzerland and South Africa to contrast the relationships in different scenarios over a 10-year period. The study brings forth the findings that wellbeing is concentrated among the higher end of the income distribution in both countries but that the level of wellbeing concentration is lower in Switzerland as compared to South Africa. The Oaxaca–Blinder decomposition of the Erreygers-corrected concentration index indicates that the differences in the wellbeing concentration levels of the two countries are due to both the difference in the levels of income as well as the differences in the marginal utility of income in the two countries. Results indicate that South Africa’s pro-rich concentration of wellbeing would decrease substantially with Swiss endowments. On the other hand, income based concentration of wellbeing would increase in South Africa with Swiss coefficients. The differences in the coefficients of absolute and relative income, contribute more to the differences in wellbeing concentration in the two countries than the levels of these variables. This indicates that the level of income and relative income is important in understanding the impact of these variables on wellbeing inequality. Further, the decomposition analysis of the concentration index for each country to understand the relative importance of variables indicates that while relative income is a significant driver of wellbeing inequality in South Africa and Switzerland, its importance is lower than absolute income in determining the concentration of wellbeing.

ENERGY DEMAND AND RACE EXPLAINED IN SOUTH AFRICA: A CASE OF ELECTRICITY

The study investigated the influence of race in the demand for energy in South Africa using electricity as a case study. The driving force behind the study was to establish whether race still plays a role in access to energy in the country, 26 years into democracy. The study’s contribution is premised on influencing the development of policy that addresses energy inequality in South Africa and the world at large. Using the logistic regression analysis, the study found that race still plays a role in the demand for energy in South Africa. The odds of demand for electricity for the White population was 46.748 per cent higher than that of Blacks, Colored, and Indians combined. Other significant variables were gender, age of household head, net household income per month in Rand and household size. Despite constituting much of the populace in South Africa, the demand for electricity of the Black population was third compared to other races. Such findings reflect the reality that many of the Black households are suffering from energy poverty. Given these results, it is recommended that the South African government invests more in energy and alternative sources of clean energy such as solar and wind which can cater for much of the population.

Educational Homogamy, Positive Assortative Mating and Income Inequality in South Africa: An Unconditional Quantile Regression Analysis

Apart from being the first attempt at investigating the impact of education-based homogamy and positive assortative mating on income inequality in a developing country context with very high levels of inequality and low education levels, this study pioneers in analysing the nonlinear relationship between mating patterns and income inequality. Further, the study contributes by the use of unconditional quantile regression and other distributional measures facilitated by the recentered influence function (RIF) method. The study finds convincing evidence of the existence of homogamy and positive assortative mating in South Africa. However, the strength of the relationship is seen to be weakening among younger cohorts as compared with older cohorts. The study further finds a non-linear U-shaped relationship between income inequality and the level of education-based homogamy, while a negative relationship is revealed between positive assortative mating and income inequality.

Does Remittance Inflow Granger-Cause Economic Growth in South Africa? A Dynamic Multivariate Causality Test

In this study, we examine the dynamic causal relationship between remittances and economic growth in South Africa during the period from 1970 to 2017. Although South Africa is well-known for being a source of cross-border remittances to various countries, especially in the African continent, remittance inflows to South Africa have grown in the recent past. The growth in remittances, on one hand, and the need to fight against poverty and inequality in South Africa and ultimately improve economic growth, on the other hand, prompted the need for this study. The study uses the autoregressive distributed lag (ARDL) approach within a multivariate Granger-causality setting to examine the remittance-growth causal link—in an effort to address the variable-omission bias. The empirical findings of the study show that remittances and economic growth are not causally related in South Africa, irrespective of whether the estimations are done in the long run or in the short run. This finding, though contrary to the expectation, is not surprising, given the level of financial sector development in South Africa.

Measuring wealth inequality in South Africa: An agenda

ABSTRACTUnderstanding wealth inequality has unique significance in South Africa. The co-existence of extreme poverty and extreme wealth is starkly visible. Apartheid-era inequality has persisted despite more than 20 years of democracy. Much of the recent research focus on inequality has been on inequality of income and of opportunities, especially quantitatively. With the recent project to release South African tax administrative data for research, this paper hopes to show how use of the tax administrative data can contribute to developing a refreshed quantitative analysis of wealth inequality, especially in estimating the top shares of the wealth distribution, and so contribute to the existing literature on wealth inequality in South Africa. The first section will explore why studying wealth inequality is of fundamental importance. The second section will review international data and methods used to research wealth inequality, before laying out suggested approach to doing such studies in South Africa.

PART A: Socio-Economic Inequality in South Africa and the Continual Plight for Social Protection in the Future World of Work

ABSTRACTThe paper examines the socio-economic landscape of South Africa by exploring the different determinants of inequality and poverty. The paper seeks to bring to the fore how the above mentioned landscape feeds the continual plight for social security in South Africa even in the advent of new systematic revolutions such as the 4th Industrial revolution.

The role of corrosive internalisation and denial of responsibility in stabilising inequality in South Africa

ABSTRACTThis paper examines how capabilities inequality is stabilised through its consequences on those at both ends of the distribution. It outlines the development of the balance model, which is argued to help highlight these consequences. Specifically, how adverse environments associated with lack of access to resources and poor treatment can lead to internal consequences which further corrode capabilities. At the same time, denial of this corrosion or its importance is critical for those who benefit from the inequality. To avoid moral constraints being triggered it is important, necessary even, for them to see those who suffer as outside of their moral universe, or their suffering to be in no way associated with their advantage. Corrosion and denial work to stabilise the system. For those in the middle of the distribution, they may work to do so in combination. Appreciating these internalised consequences is key to addressing inequality in South Africa.

Growth and Inequality: The South African Case in International Context—The Central Role of the Labor Market

Abstract The relationship between economic growth and inequality has not been settled. Using South African time series data, the core finding of this article is that growth and inequality codetermine one another: growth lowers inequality, and falling inequality in turn serves to stimulate growth. There are additional statistically and substantively significant drivers of inequality in South Africa. Labor absorption (job creation) is the most important of these. The opening of the South African economy post 1990, the lowering of credit rationing in the economy in the 1990s, and the fiscus all prove to exert important influence on the net inequality outcome also. The findings imply that the strongest policy levers suitable for raising average welfare and lowering inequality are policies designed to stimulate growth, increase labor absorption, extend credit to entrepreneurs, ensure household credit is broad-based, and ameliorate the disruptive impacts of globalization on labor markets.