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Inequality in south africa nature causes and responses

Rising inequality in South Africa: It has ready access to a developed economic, physical, educational, communication and other infrastructure. The second and larger nation of South Africa is black and poor, with the worst affected being women in the rural areas, the black rural population in general and the disabled.

This nation lives under conditions of a grossly underdeveloped economic, physical, educational, communication and other infrastructure. It has virtually no possibility to exercise what in reality amounts to a theoretical right to equal opportunity. The South African economy is witnessing positive growth, declining poverty and increasing inequality.

The paper argues that the labour market sits centre-stage as the driver of South African income inequality and that the policy initiatives by the South African Government to address inequality have been, at the most, only modestly successful. The previous regime perpetuated income poverty and exacerbated income inequality in very inequality in south africa nature causes and responses ways.

Africans, Coloureds and Asians were dispossessed of most of their land, faced restricted opportunities for employment or self-employment, were limited to low-quality public education and health care, and were physically confined to impoverished parts of the countryside or cities.

At the same time, the white minority benefited from discriminatory public policies. It was hardly surprising that South Africa competed with Brazil and a handful of other countries for the indignity of having the most unequal distribution of income. Poverty did not exist alongside affluence, because segregation kept the rich and poor apart, but they certainly coexisted in the same country.

Though absolute, relative and income poverty have decreased in the 2000s, income inequality has actually increased. Other development indicators like access to sanitation, electricity, gross enrolment rates and immunisation coverage have shown more optimistic trends.

Ironically, the inequality in south africa nature causes and responses in inequality has co-occurred with the rise in economic growth in South Africa. With an income Gini coefficient of around 0. Significant differences between the population and income shares exist. Africans are spread relatively evenly across the lower deciles, while the other racial groups are concentrated around the upper deciles.

A useful property of this measure is that it is decomposable into a share of the total measured inequality that is attributable to inequality within each of the racial groups Gini coefficient is not decomposable over groups and a share that is attributable to inequality between racial groups.

Recent studies have found an increase in the contribution of within-group inequality to total inequality, driven to a large extent by the increase in inequality amongst Africans. The rising inequality amongst Africans has been driven by high African unemployment on the one hand and increasing incomes at the very top of the distribution on the other.

At the heart of high inequality lies the inability to create employment opportunities on a large enough scale. In the first quarter of 2012, unemployment in South Africa stood at 25. Income components by decile, inequality in south africa nature causes and responses 14 The decomposition of income sources has key implications for assessing inequality. The above figure shows that earnings from the labour market make up the bulk of total income for higher deciles, while the inequality in south africa nature causes and responses of Government grants is particularly important for poor inequality in south africa nature causes and responses.

From 1993 to 2008, the contribution of remittances to total income has steadily decreased for the lowest deciles, suggesting a crowding out of private transfers by public transfers. Capital incomes like dividends and interest remain small for all except the top deciles.

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Alternative perspective to inequality The access to opportunities is an important predictor of future outcomes. Interestingly, analysing such opportunities for children in South Africa can help better understand the nature and causes of inequality of outcomes observed among adults. Opportunities among children can also be reliable predictors of economic mobility across generations and over inequality in south africa nature causes and responses. It aimed to answer, among other questions, what circumstances shape inequality of opportunity in South Africa.

Location of the household whether a child lives in a township and informal settlement or a rural area as opposed to other urban area and education of the household head a broad proxy for the socioeconomic status of the household contribute most to inequality of opportunity.

Many of the apparent racial and gender gaps in opportunities for children in South Africa today could therefore be narrowed if opportunities could be equalised across groups differentiated by socioeconomic status and, above all, location.

Academic research has found interventions that equalise opportunities earlier in life to be much more inequality in south africa nature causes and responses and successful in reducing inequality than those later in life. Coupled with the neoliberal free market policy of post-apartheid South Africa, it accentuated the range of inequalities.

Post-democratisation, a number of Government policies have been designed to address the often interrelated problems of inequality, poverty and unemployment. The fiscal policy leg of economic policy becomes increasingly important when the Government aims to address the problem of inequality by trying to redistribute gains from economic growth.

On the fiscal front, one of the policies that the South African Government has implemented quite successfully is the provision of social grants. These grants are generally well targeted and mostly reach the poorest of the poor. Grants are targeted at the most vulnerable members of society, specifically the disabled, the aged and children.

Grant income has been found to make a substantial contribution to total income, and is often used to support an entire household. Not only has the share of social grant expenditure in GDP increased significantly, but the number of social grant recipients has also increased meaningfully.

Altough social grants have proven to be an effective policy measure; they do not constitute a sustainable solution in the long run. This emphasises the need inequality in south africa nature causes and responses consider other policy options. One alternative is policy interventions aimed at creating employment on a large scale. The goal of the second phase of EPWP is to create 2 million full-time-equivalent jobs for poor and unemployed people in South Africa so as to contribute to halving unemployment by 2014, through the delivery of public and community services.

Under CCTs, the Government only transfers the money to persons inequality in south africa nature causes and responses meet certain criteria.

These criteria may include enrolling children into public schools, getting regular check-ups at the doctor's office, receiving vaccinations, or the like.

CCTs are unique in seeking to help the current generation in poverty, as well as breaking the cycle of poverty for the next through the development of human capital.


Considerable literature has studied the impact and effectiveness of CCTs. Results have been generally positive and the effectiveness of CCTs was found to be strongly linked to the conditionality of cash transfer. One of the important features of CCTs is that they could be designed to address more than one policy issue simultaneously like poverty and education or poverty and health.

South Africa inequality in south africa nature causes and responses seek to experiment the CCTs as a part of its fiscal policy interventions to address inequality. Conclusion Inequality in South Africa is a pressing concern. It has a complex relationship with economic growth, poverty and race. Though the South African economy is witnessing positive growth and poverty is showing a declining trend, gains from economic growth have not been equitably redistributed.

The South African economy is increasingly becoming more unegalitarian. It is one of the most unequal societies in the world with a Gini coefficient of 0. More worrisome is the fact that inequality has shown an increasing trend. Inequality in South Africa has historical and structural causes; it is also deeply intertwined with issues of unemployment and poverty. Inequality entrenched in the economic structure of a society is often difficult to reverse. Addressing the issue of inequality in South Africa needs an integrated and multi-pronged approach.

The Government has inequality in south africa nature causes and responses implementing various policies, especially fiscal policies, to address the problem of inequalities. However, these policies have mostly taken the form of social grants, which is not a sustainable solution in the long run.

In addition, policies aimed to create jobs, like the EPWP, have only seen moderate success. Fiscal policy interventions could be useful to address inequality in the short and medium term, whereas a human opportunities approach could be used to target inequality and poverty in the long run.

It is time South Africa shifted its economic model from pro-growth to pro-poor growth. It is commonly used as a measure of inequality of income or wealth. A Gini coefficient of 0 expresses perfect equality whereas that of 1 expresses maximal inequality among values.