Persistence of Inequality after Apartheid: Assessing the Rol e of Geography and Skills
Abstract:
South Africa remains one of the most unequal countries in t he world, despite the formal end of Apartheid in 1994. This paper develops and quantifies a model with spatially segregated residential, educational, and labor markets to examine the persistence of inequality in Aouth Africa. We explore the role that Apartheid-era policies of racial segregation, par ticularly the establishment of “Townships” for non-White urban populations, have played in sustaining high levels of inequality. Our model incorporate s heterogeneous agents, incomplete markets, and endogenous choices regardin g savings, education, and occupation in a dynastic overlapping generations framework. Using household-level data spanning both the Apartheid and post- Apartheid periods, we establish key empirical facts about the persistence o f inequality and calibrate the model accordingly. The model provides insigh ts into the mechanisms by which geography and segregated educational and labor opportunities contribute to long-term inequality. We then assess the extent to which these standard economic forces account for the observed patterns of inequality and explore counterfactual scenarios to evaluate po licy interventions.
DTSTAMP:20260423T021550Z DTSTART:20241014T163000Z DTEND:20241014T180000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR