Browsing by Subject "income inequality"

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    The post-apartheid distributional regime
    (2004) Seekings, Jeremy; Nattrass, Nicoli
    Public policies affect income inequality both directly and indirectly. The direct effects are most obvious. Redistribution through the budget, with tax revenues spent on public welfare schemes and other social policies (especially education), might serve to mitigate inequality. But public policies also affect inequality through shaping the growth path of the economy and the labour market. Together, these policies constitute what we call a ‘distributional regime’. In South Africa, the Post-Apartheid Distributional Regime includes some very propoor features. Welfare expenditure is very redistributive, especially through the old-age pension, and education and other social spending is pro-poor in that a very high proportion is spent on the poor. But the Post-Apartheid Distributional Regime includes other features, inherited from the apartheid period, that contribute to high or even rising inequality. Policies affecting the growth path and the labour market contribute to rising unemployment, which underpins poverty and inequality. Deracialisation, including ‘black economic empowerment’ and affirmative action, are largely irrelevant to overall levels of inequality. There are weak pressures for more uniformly pro-poor policy because poor voters are deeply loyal to the governing African National Congress and anti-poor policies are often opaque.
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    Open Access
    The effect of economic growth volatility on income and wealth inequality in South Africa
    (2024) Smith, Aarin J; Gossel, Sean J
    This study uses a vector error correction model with impulse response, variance decomposition, and block Granger causality analysis over the period 1975-2018 to identify the effect of economic growth volatility on income inequality and wealth inequality in South Africa, and to determine whether this effect is more significant for income inequality or wealth inequality. The results show that economic growth volatility leads to long-term increases in both income inequality and wealth inequality with wealth inequality equalising at a higher level than income inequality. In addition, economic growth volatility is found to affect income inequality in the short- and medium-term and wealth inequality in the long-run. Furthermore, economic growth volatility is found to unidirectionally drive income inequality while population growth has a bidirectional causal association with income inequality. None of the factors are found to significantly drive wealth inequality but wealth inequality is found to drive population growth