South Africa’s Changing Income Distribution in the 1990s

The redistribution of income from whites to previously disadvantaged population groups - that started in the 1970s - accelerated considerably during the 1990s. However, this redistribution among race groups did not result in a reduction in the gap between rich and poor households, since a sizeable portion of the redistributed income accrued to the wealthier households in the previously disadvantaged groups. In fact inequality rose slightly between 1991 and 1996 with the Gini coefficient rising from 0,68 to 0,69 over that period. These trends are largely explained by developments in the labour market. There was a sizeable decline in employment over the period under review, with the majority of job losses being experienced by whites. Furthermore there was a shift in labour demand towards highly skilled labour, with a rapid rise in employment of people of colour in highly skilled positions.