Earnings Inequality in South Africa, 1995 – 2003

by WOOLARD, I. & WOOLARD, C. , 2006
Employment Growth & Development Initiative Occasional Paper No. 1. Cape Town : Human Sciences Research Council Press

Woolard and Woolard use October Household Survey and Labour Force Survey data to establish whether the real earnings gap between highly skilled and low-skilled workers in the formal sector of the South African economy narrowed or widened between 1995 and 2003. It also assesses changes in the earnings gap between whites and other race groups, and between men and women in this period. The paper finds that the earnings of unskilled men and women declined, while the earnings gap between low-skilled and more highly skilled workers and managers widened. The gap between the earnings of African and white managers narrowed, as did the gap between male and female managers. The real earnings of highly skilled workers of all races remained constant, which means that the earnings gap between highly skilled Africans and whites did not narrow. Similarly, the racial earnings gap among workers in skilled occupations did not close. It is clear that white men were still preferred for positions of responsibility, and consequently had higher earnings. The earnings of both male and female semi-skilled Africans declined slightly, and the earnings of semi-skilled men of all races declined. The earnings gap between workers in low-skilled and highly skilled occupations was significantly smaller in the public sector than in the private sector.