South Africa Persistent Inequality Research

Scholars and policy-makers are increasingly concerned with the persistence of high levels of inequality in emerging economies. High levels of inequality have been associated with undesirable outcomes, such as social conflict and political instability. Reducing inequality levels is also considered to play an important role in reaching poverty reduction targets and may be associated with efficiency gains and growth.

South Africa given is one of the most unequal countries in the world and, surprisingly, levels of inequality have not decreased since the advent of democracy in 1994. SAPIR seeks to shed light on the factors that account for this persistently high inequality. Its goal is to build an integrated body of research on the mechanisms underlying the persistence of inequality in South Africa. SAPIR focuses on three main research areas: education, the labour market and redistribution (more details on the questions to be answered under each research area are provided under the Activities tab).

A set of policy-relevant empirical studies will be undertaken on these issues, with particular attention paid to the proper identification of causal effects. Methods used include randomized control trials, instrumental variables, and regression discontinuity designs.

Research area 1: Education

  • How does school quality affect educational attainment and subsequent employment outcomes?
  • Determinants of school quality: Resources. Do non-personnel financial resources improve school quality?
  • Determinants of school quality: Decentralization and parental involvement. Does decentralization of school governance improve school quality?
  • Does lack of information about financial aid and wages prevent the poor from accessing higher education?

Research area 2: Labour market

  • How much of inequality in net wages within urban areas arises due to differential transport costs?
  • How much of South Africa’s inequality can be attributed to demographic characteristics such as race and gender?
  • How much does education affect job stability in South Africa?
  • To what extent does having employed parents improve young adults’ employment prospects?

Research area 3: Redistribution

  • Do functional accountability mechanisms improve the delivery of basic services to the poor?
  • Does increasing competitiveness of elections favor pro-poor spending?
  • Are ward councillors more accountable than those elected by proportional rule?
  • Are ward councillors more likely to establish clientlistic linkages with voters than PR-councillors?
  • (How) do municipal councils allocate the government funds dedicated to the poor?