Understanding Contemporary Household Inequality in South Africa

This paper uses various decomposition techniques to understand the nature of household inequality in contemporary South Africa. It examines, firstly, the importance of race in overall inequality; secondly, the contribution of major income sources to national inequality; and thirdly, the relationship between inequality, poverty and the labour market. Within-race inequality is also high with intra-African inequality being highest. The paper also shows the importance of differential access to wage income in driving household income inequality in South Africa. Gauteng, South Africa's economic powerhouse, has long been dependent on immigration to supply its labour requirements, a phenomenon deeply rooted in the provinces early economic history and the development of mining and heavy industry. South African immigrants to the province (or in-migrants) were defined in one of two ways: individuals who were born in South Africa, but outside of Gauteng, or individuals whose most recent move in the 1996-2001 period was to Gauteng from one of the other eight provinces. In-migrants are described in terms of their demographics and educational and employment status. Further, in-migrants access to public services including electricity and water and other indicators of their living standards, such as housing, were analysed. As far as possible, the analysis compared in-migrants to non-migrants and intra-Gauteng migrants in order to provide insight into special benefits or challenges that in-migrant households may present. The Labour Force Survey module on migrant labour allowed the profiling of migrant labourers and the approximation of economic links between Gauteng and other provinces as represented by remittances. The study found that a large proportion of Gauteng residents were born outside the province, or moved into the province in the inter-census period, indicating a relatively mobile population.