Apartheid, Growth and Income Distribution in South Africa: Past History and Future Prospects

IMF Working Papers, December 1, 1991

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Bibliographic details

• Authors: Robert J Corker, Tamim Bayoumi
• Published: December 1, 1991
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451853902.001

Summary of model and approach

• Estimates are derived from a supply-side model of the nonprimary sectors.
• The model places particular attention on modeling key characteristics of the evolution of the apartheid system.
• Focus is on wage differentials and the distributional consequences of apartheid-era structures.

Key findings and quantitative results

• The wage differential between white and nonwhite workers doing similar jobs fell significantly over the last two decades to around 14 percent in 1990.
• The observed wage gap in 1990 is characterized in the paper as a "relatively small gap" compared with earlier periods.

Implications and interpretation

• Because the residual wage differential by 1990 was around 14 percent, medium-term prospects for the advancement of disadvantaged groups depend heavily on their ability to take up skilled employment.
• The direct gains from the elimination of apartheid, as estimated by the model, are characterized as relatively small; thus, access to skilled jobs is a crucial channel for improving incomes of disadvantaged groups.

Policy-relevant considerations (derived from implications)

• Policies that improve access to skilled employment for disadvantaged (nonwhite) workers are central to enhancing medium-term income prospects.
• Supply-side measures that affect skill acquisition and matching into skilled positions merit priority given the modest direct wage gains from eliminating apartheid structures alone.

Subjects and keywords (as listed)

• Employment, Income, Labor, Labor force, Labor markets, National accounts, Wages
• Africa, Employment, Income, income share, Labor force, nonwhite wage, nonwhite worker, wage, wage discrimination, wage rate, wage wedge, Wages, WP

Apartheid, Growth and Income Distribution in South Africa: Past History and Future Prospects, Robert J. Corker and Tamim Bayoumi, IMF Working Papers 1991, 116.