Racial Inequality and Redistribution in Post-Apartheid South Africa

Léo Czajka and Amory Gethin
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Léo Czajka: EU Tax - EU Tax Observatory, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Amory Gethin: BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale, WIL - World Inequality Lab, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris

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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.

Date: 2025-12
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