Decomposing Well-being Measures in South Africa: The Contribution of Residential Segregation to Income Distribution

Florent Dubois and Christophe Muller

No 1719, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: Despite the influential work of Cutler and Glaeser [13], whether ghettos are good or bad is still an open and debatable question. In this paper, we provide evidence that, in South Africa, ghettos can be good or bad for income depending on the studied quantile of the income distribution. Segregation tends to be beneficial for rich Whites while it is detrimental for poor Blacks. Even when we find it to be also detrimental for Whites, it is still more detrimental for Blacks. We further show that the multitude of results fuelling this debate can come from misspecification issues and selecting the appropriate sample for the analysis. Finally, we quantify the importance of segregation in the income gap between Blacks and Whites in the post-Apartheid South Africa. We find that segregation can account for up to 40 percent of the income gap at the median. It is even often a larger contribution than education all across the income distribution.

Keywords: post-apartheid South Africa; generalized decompositions; income distribution; residential segregation (search for similar items in EconPapers)
Pages: 46 pages
Date: 2017-05
New Economics Papers: this item is included in nep-hap and nep-ure
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Working Paper: Decomposing Well-being Measures in South Africa: The Contribution of Residential Segregation to Income Distribution (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1719

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