Racial Inequality and Redistribution in Post-Apartheid South Africa

Léo Czajka and Amory Gethin
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Léo Czajka: EU Tax Observatory – Paris School of Economics
Amory Gethin: World Bank and Paris School of Economics – World Inequality Lab

No 40, Working Papers from EU Tax Observatory

Abstract: We study post-Apartheid inequality dynamics in South Africa using a new microdatabase that combines survey, tax, national accounts, and budget data from 1993 to 2019. Until 2005, pretax inequality rose, racial disparities widened, and redistribution stagnated. Thereafter, pretax inequality fell back toward its 1993 level, while major expansions in tax-and-transfer progressivity sharply reduced posttax inequality. Rapid growth of top Black incomes contributed to halving the White-to-Black pretax income ratio and shifted 20% of taxes from Whites to top Black earners. Despite reaching its lowest point in history in 2019, the racial gap remains extreme by international standards, even after redistribution.

Keywords: Income Inequality; Taxation and Redistribution; Racial Inequality (search for similar items in EconPapers)
JEL-codes: D31 H23 I32 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2025-12
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