Question

Evaluate South Africa’s approach to redistribution of wealth and income. ​

Answer 1

Answer:

For decades, there has been interest in South Africa in the distribution of personal income across population groups.  In 1970, as in 1917, Whites had 70% of household income.  However, the 2011 census yields the following estimates of shares:

Blacks43.4%Coloureds8.0%Asians6.2%Whites41.5%Unspecified0.9%

The change has been possible without much change in the Gini coefficient because “within group” inequality has risen as “between group” inequality has dropped.  The growth of the middle class has had much to do with the rise of within group inequality.  More generally, inequality can be explained in terms of the shares of household income coming from returns to assets, earnings and transfers.  Expended social grants in recent years have had the effect of reducing the number of people below a constant real poverty level.  Earnings inequality remains high in South Africa, with the ratio of earnings at the 50th percentile in relation to those at the 10th percentile, and the ratio of those at the 90th percentile in relation to those at the 50th percentile,  both being well above international averages.