Income inequality after apartheid

Abstract

This paper investigates changes in and patterns of income inequality in South Africa during the post-apartheid period 1994 to 2004. While findings show a rapidly growing high-income African population (a trend that began before 1994 and continued thereafter) as well as rising real wages for workers in formal employment, overall levels of income inequality have not been declining This is due to rising unemployment and a small informal sector that have therefore left unchanged South Africa's high level of income inequality. If anything, overall inequality has worsened. Inter-racial inequality has decreased while intra-racial inequality has increased. Opportunities have improved for some African people in South Africa, but not for all: a lack of human and social capital leaves many with little chance of rising out of poverty; AIDS-related mortality and morbidity are likely to exacerbate stratification and further increase inequality.